By Khairul Khalid
1MDB (1Malaysia Development Berhad) has settled a RM2 billion loan just days before its deadline, according to an official statement by 1MDB.
Arul Kanda
“I can now confirm that 1MDB has settled, in full, a RM2 billion loan owed by an operating subsidiary of ours to Malaysian banks. The loan was settled in advance of the due date, per the terms of the loan facility agreement. With the settlement of this loan, I reaffirm 1MDB’s commitment to continue meeting all our debt obligations as they become due,” said Arul Kanda, 1MDB’s president and group executive director
The loan was reportedly due to 1MDB’s lenders Malayan Banking Bhd (Maybank) and RHB Capital Bhd. With the looming loan deadline of February 18, there were rumours that the banks were planning to classify 1MDB as a defaulter and its debt as a NPL (non-performing loan).
There has been intense speculation in the last few weeks that billionaire Ananda Krishnan, owner of telecommunications giant Maxis, was in secret negotiations to bailout 1MDB and pay off the RM2 billion loan. It has also been said that Ananda might be offered ownership of 1MDB’s power assets once it is public listed.
Ananda Krishnan
It is still unclear whether it was indeed Ananda who has finally settled this long standing loan. 1MDB’s press statement neither confirms nor refutes Ananda’s involvement.
“ I’m afraid that, as I have said in the past, the matter you refer to relates to a private agreement between 1MDB and its banking partners. Any such agreement is bound by confidentiality clauses and, as such, we are unable to comment specifically on this matter,” a 1MDB official told KiniBiz earlier today, when asked about Ananda’s possible involvement.
1MDB, a strategic development company wholly owned by the government of Malaysia, has repeatedly maintained that it has not defaulted on any loans, as yet. The default status threat comes after Fitch Ratings said 1MDB’s financial status is a “source of uncertainty” because the state guarantees some of its borrowings.
The RM2 billion loan is a small portion of the firm’s RM41.9 billion total liabilities as at March 31, 2014. The loan was granted extensions twice, once last November and again last month.
It has been reported that 1MDB subsidiary Powertek Investment Holdings Sdn Bhd took the loan last May to refinance a RM6.17 billion bridging loan taken in 2012 to part finance the purchase of its power assets.
It was also reported that 1MDB restructured the RM5.5 billion bridging loan into two tranches – a RM3.5 billion loan due by August 2024 and a RM2 billion loan due last November.
1MDB’s power assets encompass Ananda Krishnan’s former Tanjong Energy, now renamed Powertek Energy following the purchase by 1MDB; a 75% stake in Genting Sanyen Power, which is now known as Kuala Langat Power Plant; and a 75% stake in Jimah Energy.
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