KUALA LUMPUR (Jan 17): The Federal Land Development Authority (Felda) is considering the disposal of its overseas assets after selling down its shareholding in Malayan Banking Bhd (Maybank).

Felda chairman Tan Sri Shahrir Abdul Samad said today that the agency hopes to earn more than RM500 million by selling the overseas assets.

"You will see more disposals this year, particularly overseas assets, like the hotels (in London). I would say we are looking to dispose (of) it for more than RM500 million. The returns from hotel investment is not justified, but the value has appreciated," he told a press conference.

Yesterday, newswire Dow Jones, citing a bank's term sheet, reported that Felda is selling down its stake in Maybank to raise some US$64.1 million (RM280 million).

Shahrir said the disposal was mandated by Felda's board of directors last November, prior to his appointment as chairman effective Jan 1 in place of Tan Sri Isa Samad.

"In November, the board decided to review investments by Felda, including Maybank shares. Amongst the decisions, one of it is to dispose (of) Maybank shares that have been held for a long time," he said, adding that the sale involved 35 million Maybank shares at between RM8 and RM8.05 apiece.

Shahrir said the money raised from the disposal will not be used to fund the proposed acquisition of a 37% stake in PT Eagle High Plantation Tbk for US$505.4 million.

"The funds raised from Maybank shares disposal will be utilised for various Felda settlers' programmes to fulfill Felda's responsibility," he said.

"We are also looking at various assets that we own. Some assets have appreciated. As institutional investor, we have to emphasis on good returns. Once the asset is not able to achieve reasonable return, and with higher valuation, it is better to dispose (of) it," he added.

On the acquisition of the Eagle High stake, Shahrir said Felda has not entered into any arrangements to fund the purchase.

But he gave an assurance that the money will not come from within Felda, and that there will not be a government guarantee.

Elaborating on the matter, Felda deputy director general Muzzammil Mohd Nor said the government will raise money through a number of channels, which have yet to be finalised, and subsequently extend a loan to Felda to finance the acquisition.

"It will not be a government guarantee, the federal government will be our creditor, and they will raise the fund through their own channels," he said.