Malaysian state palm oil firm Felda seeks $1.5 billion government bailout: Bloomberg

KUALA LUMPUR (Reuters) – Malaysia's state palm oil plantation agency, the Federal Land Development Authority, is seeking 6 billion ringgit ($1.5 billion) from your government to assist turn itself around, Bloomberg reported .

The request shall be part of a white paper around the company scheduled to get introduced in parliament on Wednesday, Bloomberg reported, citing a source. If approved, the funds will be paid in stages, the report said.

Felda, for the reason that state-owned business is known, have been struggling to repay debt amid financial losses and corruption allegations.

The government of Mahathir Mohamad, who found power a year ago after defeating Malaysia's longtime ruling coalition, had vowed to review Felda's financial troubles and alleged graft.

Felda and Malaysia's Ministry of Economic Affairs, which is preparing the white paper, could not react to requests for reply to the Bloomberg report.

Finance Minister Lim Guan Eng told reporters the us government wanted to support Felda for the reason that previous government had caused "huge losses". He failed to elaborate.

Felda was created to help palm oil farmers, who help the company, and has a one-third stake in FGV Holdings Bhd, the world's largest crude palm oil producer.

Palm oil farmers on Felda land are grappling with rising costs of life as well as debt due to insufficient income.

Felda has diversified in recent times into property, including hotels, both locally and overseas, but may be littered with issues of poor management.

Last year, Felda stated it would sell assets including property working in london, restructure some loans, and try to boost cash flow to trim nearly $2 billion in financial trouble.

A former Felda chairman was charged in December with breach of trust and receiving bribes over the buying a Malaysian hotel because is at management of Felda.

The Mahathir government states it could investigate several "highly suspicious" deals made by the prior administration, such as $500 million purchasing a non-controlling stake in Indonesia's Eagle High Plantations. The deal had drawn criticism because it was viewed as overpriced.