KUALA LUMPUR (Sept 20): Federal Land Development Authority (FELDA) expects to lower its debt to RM6.5 billion by year end, from RM8.03 billion currently, through a financial restructuring plan. 

FELDA Chairman Tan Sri Megat Zaharuddin Megat Mohd Nor said the group aims to do this mainly via asset monetisation through the sale of various properties.

The assets, which range from hotels in London, Kuching and Kota Kinabalu, were bought at an accumulated price of up to RM2.2 billion, Megat Zaharuddin said. 

"When I took over 7 weeks ago, I found that one of the biggest challenges was that Felda's cash flow was almost empty," he added.

"It had taken a lot of loans from banks and we could not service the interest. So we had to review our financial position. I have conducted a few turnaround plans in my time, but I have to tell you that this one is big," he said during his first media briefing earlier, since being appointed Chairman on July 27.

The weak cash flow problem was also due to low palm oil prices, he added. 

"As a result, I had to go to banks to get a lifeline on the repayment of its loans," he said.

"By doing this, we hope to improve the short term cash flow and hopefully turn Felda around in a minimum of 2 years," he said.

Megat Zaharuddin also said Felda will be submitting a white paper to the government which will be tabled at the next parliamentary sitting. The paper will address various issues in Felda, which include prior poor planning, governance and malpractices.