By Khairul Khalid
The RM42 billion debt of 1MDB (1Malaysia Development Bhd) are all accounted for, said Arul Kanda, president and group executive director in a media statement today.
Arul Kanda
“In recent weeks, there has been much speculation about the use of RM42 billion of debt raised by 1MDB, and more specifically that RM27 billion of debt proceeds are alleged to be “lost” or “missing.”
We provide a summary of what the RM42 billion debt has been used for, information that is fully disclosed in 1MDB’s audited and publicly available accounts from 31 March 2010 to 31 March 2014,” said Arul.
The 1MDB president breaks down 1MDB’s use of the RM41.8 billion debt – RM18 billion for purchases of Independent Power Plants (IPPs) Powertek, Kuala Langat and Jimah; RM1.7 billion for land purchases at TRX (Tun Razak Exchange), Bandar Malaysia and Air Itam, Penang; RM15.4 billion for investments in Brazen Sky, Aabar investment deposits and GIL (funds); RM5.8 billion financial expenditure including cost of finance and working capital, foreign exchange cost and taxes paid; as well as RM900 million of surplus cash.
“We trust this clarification will help to clear any confusion on this matter,” said Arul. The debt ridden 1MDB is a strategic development company wholly owned by the government of Malaysia. Prime Minister Najib Razak is chairman of 1MDB’s board of advisors.
On May 29, Second Finance Minister Ahmad Hanadzlah announced that The United Arab Emirates’ International Petroleum Investment Co (Ipic) will pay US$975 million (RM3.57 billion) of 1MDB’s debt to an international banking consortium that is demanding payment four months ahead of schedule.
According to the minister, the proposal has been submitted to the cabinet..
“As part of this agreement, Ipic will make a payment of US$1 billion, on or before June 4, 2015. This US$1 billion payment will be used to repay a US$975 million loan, in advance of its due date, to a syndicate of international bank lenders.
“The agreement will also include further measures to comprehensively address the various financial asset and liability transactions between the parties, further details of which will be announced in due course,” Husni said in a statement last week.
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