Malaysia's state-owned Federal Land Development Authority (Felda) will be floated by the end of the year to emerge as the world's largest listed oil palm estate, reports said today.

Second Finance Minister Jamaludin Jarjis was quoted by the Sunday Star as saying that the government would retain a 75 percent stake through various agencies and float the rest on the open market.

"We expect Felda Holdings to be within the top 10 companies on the (stock exchange) going by the size of market capitalisation and certainly the biggest integrated oil palm company in Malaysia and globally," he said.

Bernama news agency quoted the minister as saying that "when listed, it will also be the biggest oil palm estate to be listed on any stock exchange," adding this would attract big institutional investors to Malaysia.

Prime Minister Dr Mahathir Mohamad in his 2004 budget on Friday announced the listing of Felda, Malaysia's largest plantation owner, to allow it to tap funds from the capital market and cut dependence on the government.

Jamaludin said thousands of Felda settlers, who have a 51 percent stake in Felda Holdings, would get an average of RM6,000 (US$1,579) worth of shares each based on a RM1 billion allocation.

Details of the initial public offering (IPO) will be announced later, he said.

Benefit settlers

"The scheme will benefit settlers financially while preserving their current position. At the same time, the IPO will improve Felda's financial flexibility, diversify its investor base and increase transparency."

Felda directly owns 354,554 hectares of plantation land, while settlers have another 447,246 hectares of plantation land.

On the government's earlier plan to encourage small estate owners to merge and become a larger listed company, he said the plan was still on and Felda's listing would be the "ice-breaker."

Malaysia is the world's largest palm oil producer, accounting for about half of global output. - AFP