Rajawali blocking Felda from exercising put option in Eagle High deal — Azmin Ali

KUALA LUMPUR (April 10): PT Rajawali Group is opposing the Federal Land Development Authority (Felda) from exercising a put option provided for in the purchase agreement signed by the two parties, Economic Affairs Minister Datuk Seri Mohamed Azmin Ali (pictured) said today.

The agreement is in relation to Felda's purchase of a 37% stake in PT Eagle High Plantations Tbk (EHP) from Rajawali. Under the put option, if Felda wants to resell the stake, Rajawali has to buy back the shares along with an interest payment of 6% per annum.

Speaking in the Dewan Rakyat, Mohamed Azmin pointed out that no due diligence was done on Rajawali when Felda undertook the purchase, putting into question the ability of the Indonesian group to repurchase the shares.

"In 2014, Rajawali's net capital asset was only US$7.2 million. How can Rajawali buy back the EHP stake at US$505.4 million?

"In early 2019, Felda sent a notice to EHP to exercise the put option. What happened? They opposed. They brought it to court. Now that the court has allowed Felda's request, Rajawali took the step to file an arbitration [against Felda]," said Mohamed Azmin.

Responding to former premier Datuk Seri Najib Razak's Facebook post on the matter, Mohamed Azmin said the issue should be debated in Parliament and not over social media. Najib was not present in the Dewan Rakyat today.

In his Facebook post, Najib defended the EHP buy as a good deal because it allowed Felda to sell back the stake if it decided not to continue with the investment by exercising the put option.

"Pakatan Harapan had accused me of cheating Felda to buy a stake in EHP, causing them to suffer losses. I have expected that PH will use this issue against me," Najib wrote. — theedgemarkets.com

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