1MDB to have RM10b assets after revamp
(Malaysian Reserve) – 1Malaysia Development Bhd (1MDB) president and CEO Arul Kanda Kandasamy said the company will have at least RM10 billion worth of assets after undergoing a rationalisation plan to clear its debts.
Speaking in a public forum on Saturday, Arul Kanda also said the government is supportive of the plan, including selling its assets.
Among the assets that the company owns include the land in Tun Razak Exchange as well as a 40% stake in Bandar Malaysia Sdn Bhd worth between RM4 billion and RM5 billion, land in Ayer Itam, Penang (RM1 billion) and Pulau Indah (RM300 million).
“1MDB took loans to purchase assets. The payment of debts is made through generating our assets,” said Arul Kanda in a packed public briefing at Putra World Trade Centre (PWTC) on Saturday.
“That is our business model. We started off with RM5 billion debts in 2009, and the amount accumulated every time we purchase or generate new assets,” he added.
Arul Kanda explained the debts amount increased significantly after the governmentowned company bought the independent power producers (IPPs) in 2012 and 2013.
He stressed that the company has more assets than its debts and is able to pay it on time.
“We bought IPPs from three private firms. We had to take RM12 billion in loan and we also inherited RM6 billion in debt from these companies.”
“Still, we had RM5 billion in revenue annually from this purchase and I think the decision (to purchase) was right,” Arul Kanda said.
Commenting on 1MDB’s plan to sell Edra Global Energy Bhd as a part of its rationalisation plan, Arul Kanda said electricity tariff will not be affected as the buyers must comply to the tariff agreed on the power purchase agreement.
Meanwhile, Arul Kanda also informed the public that the strategic development funds still have about RM4 billion of funds in its investment on Cayman Islands’ offshore company, Brazen Sky Ltd.
“Brazen Sky was the end game of the PetroSaudi (International Ltd) investment…in 2013, we invested US$1.83 billion in Brazen Sky but in 2014, the fund units grew to US$2.33 billion (RM10.23 billion),” he said in response to a public query on the issue.
He said 1MDB redeemed US$1.4 billion in cash last year while the US$940 million has not been redeemed and will be used for International Petroleum Investment Co.
