KUALA LUMPUR, Dec 29 (Reuters) - Malaysia’s Federal Land Development Authority (Felda) has secured government financing to fund its $505.4 million purchase of a minority stake in Indonesian palm oil firm PT Eagle High Plantations Tbk , state news agency Bernama reported.
In a controversial move, state-owned Felda said last week it would buy a 37 percent stake in Eagle High, paying a 95 percent premium its last closing share price at the time.
The deal has under mounting criticism this week, with opposition lawmakers and industry analysts calling the deal overpriced. Some critics have also said Felda would have to raise money to fund the acquisition.
Bernama quoted Muzzammil Mohd Nor, Felda’s deputy director-general, as saying that government financing was secured but there were no details on the amount of financing in the report.
Muzzammil also denied that the deal was overpriced, saying no other plantations of Eagle High’s size were available for sale at the valuation paid and the deal was strategically too important to pass up.
“If we don’t do this deal, we will just be on the sidelines, forcing to watch our competitors grow by leaps and bounds in this highly lucrative sector,” he was quoted as saying in an interview.
Felda did not immediately reply to a Reuters request for comment.
Reporting by A. Ananthalakshmi; Editing by Edwina Gibbs