M'sia's Felda expected to be next world player
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Malaysian company Felda has taken its first steps in establishing a global presence in conjunction with its initial public offering (IPO), seen as Southeast Asia's third-largest so far.
FGVH is preparing for what has been touted as the world’s second-largest initial public share offering this year after Facebook.
Two partnerships have been forged between Malaysia’s Felda Global Venture Holdings (FGVH) and prominent European commodity firms Louis Dreyfus Commodities Asia and Vitol Group, witnessed by Malaysian Prime Minister Najib Tun Razak at the Malaysian High Commission early this week.
The agreement with Louis Dreyfus was a strategic joint-venture partnership, seeking to lay a framework for a broad collaborative strategy comprising not only Louis Dreyfus’ proposed strategic cornerstone investment in FGVH for its IPO but also related to trading and marketing, and the downstream business. Joint ventures to this effect will be implemented.
This agreement will facilitate a synergy of the respective strengths of both companies – FGVH in the production and processing of crude palm oil and Louis Dreyfus in the merchandising of crude palm oil and refined products and the risk management of those activities.
The second signing was a memorandum of understanding between FGVH and Vitol to collaborate on the supply, international trading, marketing, logistics operations and risk management on various commodities, excluding oil and fats.
Both parties plan to incorporate a joint-venture company in Kuala Lumpur within the next six months, with FGVH taking the majority shareholding.
Commenting on this, Najib said he was confident that in addition to FGVH’s listing, the two high-profile partnerships would lead to Felda being the next world player in the commodity market.
“By extending their global reach, improving on their upstream farming activities and the intensification of downstream manufacturing capabilities, Felda will be primed to cater to a huge international market,” Najib said at a press conference yesterday.
According to FGVH CEO Datuk Sabri Ahmad, the listing would allow it to raise funds to expand its business and make selective key growth acquisitions.
“In the past months, we have been on the lookout for an international strategic partner to collaborate on our downstream operations. It has always been our intention to partner with the top global operators in the plantations industry.
“The IPO and our current global strategy is very much in line with our intention to transform FGVH into being a world player,” he said.
Meanwhile, Bloomberg reported that Louis Dreyfus had agreed to pay about US$150 million for a stake in FGVH.
Quoting sources, it said Louis Dreyfus would hold 2.5 per cent of FGVH post-listing and pay the same price as global institutional investors in the IPO.
Louis Dreyfus, a diversified group with interests in commodities, renewable energy and biomass production, is privately held by the Louis Dreyfus family and approximately 20 per cent employee-owned, according to its website.
