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Friday, May 29, 2015

MoF's rationalisation plan for 1MDB

MoF's rationalisation plan for 1MDB
KUALA LUMPUR - The Finance Ministry has presented to Cabinet a plan for the rationalisation of 1MDB, which is expected to be fully implemented by early next year.
This follows an announcement by 1MDB in February 2015, of the conclusion of a strategic review, Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said in a statement.
“As has already been achieved with Edra Energy, this will see TRX and Bandar Malaysia established as standalone companies, with full autonomy and accountability for their operational and financial performance.
“Whilst options are being pursued with respect to the monetisation of Edra Energy, the Ministry of Finance will remain a key shareholder in TRX and Bandar Malaysia, which will raise equity via third party investors,” he added.
Husni said proceeds raised will be used for capital expenditure and to reduce 1MDB’s debt. “Given the above, I am pleased to announce that 1MDB has entered into a binding agreement with the International Petroleum Investment Company (IPIC) and its subsidiary Aabar Investments (Aabar).
“As part of this agreement, IPIC will make a payment of US$1 billion, on or before 4 June 2015. This US$1 billion payment will be used to repay a US$975 million (RM3.5 billion) 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,” he said.
Husni said this agreement marks a significant step towards reducing 1MDB’s overall debt levels, and is a crucial part of the rationalisation plan presented to Cabinet, “which we expect to be implemented in full by early next year”. - NST

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