1MDB says to rely on finance ministry for debt refinancing if needed

(The Sun) – State fund 1Malaysia Development Bhd (1MDB) said on Monday that the refinancing of its debt will involve the finance ministry “as relevant and as required” after media reported that the government may inject up to RM3 billion (US$823 million) into the fund.

The Edge Financial Daily said that the finance ministry – which owns 1MDB – may have to inject cash as the fund’s income from its power assets is insufficient to service its debt.

“1MDB announced the outcome of its strategic review, in which we emphasized that 1MDB will seek refinancing “from the best available sources,” said 1MDB.

“We further stated that our 100% shareholder, the Ministry of Finance will be involved, as relevant and as required, in the interests of maximising shareholder value.”

1MDB last week said it would explore asset sales and the sale of development rights in prime property projects as it seeks to cut its debt – a US$11.6 billion burden that has weighed on the ringgit and the country’s sovereign credit rating.

Earlier this month, 1MDB settled a RM2 billion (US$550 million) loan it owed to banks but sources have said it needed a loan from Malaysia’s second-richest man Ananda Krishnan to do so.