Felda to sell stake in Encorp soon?

By ZAIDI ISHAM ISMAIL
[email protected]

KUALA LUMPUR Oct 7 – Malaysia's property sector is in the doldrums right now due to COVID-19. However, an interesting development is taking place at Encorp Berhad, a medium sized property firm.

Speculation is rife that Felda is mulling to dispose its 62.4% stake in the company soon.

"Times are tough and Felda is of no exception hit hard by the pandemic.

So the agency needs to sell the stake soon possibly worth RM80 million," a source told DagangNews.com.

He added Felda is giving a rethink on its equity in the firm.

"Encorp's The Strand mall is not doing well with almost zero foot traffic so Felda has no choice but to sell the stake," said the source.

Interestingly, Encorp appointed three new directors on the company board 2 weeks ago.

One of the directors is Datuk Shireen Ann Zaharah Muhiudeen who also sits on the Felda board.

Her appointment has raised eyebrows as she could be there to oversee the stake sale or possibly turn around Encorp.

Due to this development, Encorp share prices have also surged past the 40 sen mark over the past month, its highest in three years.

Encorp has been loss making for the past four years.

"If Felda sells the stake, it will be doing so at a loss because the share prices are below the price it bought at RM1.21 sen in 2014 worth over RM200 million.

But the property market is not going to recover anytime soon.

Maybe it's best that Felda sell its stake to improve its financial position," said the source.

Encorp owns the Strand shopping and commercial complex in Kota Damansara.

It was previously owned by businessman Tan Sri Mohd Effendi Norwawi.

"Maybe Felda might not even sell the stake as crude palm oil prices have breached the RM5,000 a tonne mark.

So maybe the good times have returned and there is no need for Felda to sell the stake," said the source. – DagangNews.com