MORE CONFUSION FROM 1GDB. ANYWAY YOU LOOK AT AT IT 1GDB WILL HAVE NETT FAR LESS THAN $7.41 BILLION FROM BANDAR TUN LAZAK LAND SALE. WHY MISLEAD THE MALAYS?

A further announcement today by 1GDB (Grossmajib Development Bunkum) that the sale of its 100% owned Bandar Tun Lazak (BTL) land company may be completed through a special purpose vehicle (SPV) adds, not detracts, to the confusion that has reigned supreme over the last week.

Last week, 1GDB and its CEO Arul Kaunda Kundi had announced that a joint venture company (JV) between a China concern and a local company would be buying 60% of the shares of BTL for $7.41 billion. The shares of the JV would be owned 60%:40% as between the China company and the local company.

However, whichever way the deal is structured, it is clear that at the end of the day, 1GDB will have far less than $7.41 billion in its kitty. This is clearly a red-herring to try and fool the public that 1GDB will be able to reduce its gynormous loan debts of $42 billion by a larger amount.

Over and above this $42 billion loan debt which has been bedevilled by accusations of fraud, misappropriation, CBT, money-laundering, mismanagement, abuse of power and self-enrichment by PM Grossmajib who is also the Finance Minister and Chief Asvisor to 1GDB, the MoF absorbed an additional $4 billion of 1GDB's loss making dodgy "investments". The silence from serially lying PM Grossmajib and the MOF as to how this additional $4 billion debt will be repaid, is deafening by its absolute silence!

As at 31st march 2014, 1GDB's balance sheet showed that it had total loans and liabilities of about $51.5 BILLION!! CLICK HERE.

The scenario and computations are so simple, it's incredible that a MoF and 100% government owned company like 1GDB cannot get the math correct!

The possible scenario and computations are as follows:

1. JV buys 60% of BTL shares at balance sheet revaluation cost:

Revalued land cost - 12.35billion

Less: loans (sukuk/relocation liabilities) - 3.55b

Net - 8.8b

Cost of 60% shares to JV = 8.8b x 60% = 5.28b

Therefore 1GDB will, as 100% previous owner of BTL, receive $5.28b, and be reduced to a 40% shareholder of BTL. BTL, as the operating company, will bear the cost of the $3.55 billion loans and settle it from future profits.

2. JV buys 60% of BTL shares and both JV and 1GDB agree to settle loans of $3.55 billion to save interest cost

a. JV pays 1GDB 60% of 8.8b = 5.28b

JV pays BTL 60% of 3.55b loans = 2.13b

JV pays in total = $7.41b

b. 1GDB receives from JV = 5.28b

Less: 1GDB pays BTL 40% of 3.55b loans = 1.42b

Net cash with 1GDB - 3.86b

BTL settles loans of 3.55b. BTL's share capital may be increased by a further 3.55b and issued 60%:40% to JV and 1GDB or BTL's balance sheet may show that the 3.55b is owed to JV and 1GDB 60%:40%.

3. BTL transfers land to SPV for revalued $12.35 billion, sells 60% shares of SPV to JV and 40% to 1GDB

a. JV cost of 60% shares in SPV = 12.35b x 60% = 7.41b

1GDB cost of 40% shares in SPV = 12.35b x 40% = 4.94b

TOTAL SPV Share Capital and land asset = 12.35B

b. BTL receives from JV and 1GDB for shares = 12.35b

BTL pays off loans = 3.55b

Net cash in BTL = 8.8b

Therefore BTL will pay 1GDB 8.8b as final dividend on winding up.

c. 1GDB receives dividend from BTL = 8.8b

Less: 1GDB pays SPV for shares 40% x 12.35b = 4.94b

Net cash with 1GDB = $3.86 billion.

Let us also clear up the misleading statement that eventually 76% of BTL will be controlled by local companies. The respective shareholdings in BTL will be:

1. 1GDB - 40%

2. Local companies - 60% x 60% = 36%

3. China company - 40% x 60% = 24%

The real facts are that the China company is the one that will control and carry out all construction and sales work which will generate profits. There is no way a China company will secure a minority stake and come up with billions of dollars of cash upfront, and commit itself to more billions of dollars in construction and selling costs, if it does not have iron-clad contractual clauses that it will control the entire business side of the BTL project. 

It will do this by having control over the board of directors of the JV. When push comes to shove, there is no way the local Chinese tycoon who has partnered the China company will vote against them. Otherwise, he might one day find his goolies nailed to the flag pole of his corporate HQ!!

But do note that serially lying PM Grossmajib has once again bailed out 1GDB by getting state and Federal-owned GLC's and sovereign funds in bailing out 1GDB's debts to the tune of billions of dollars, without accounting for the massive fraud that has taken place at 1GDB and its $51.5 billion liabilities!!

That this deal is not as kosher as PM Grossmajib and 1GDB's Chairman, CEO and Board of Directors make it out to be, is plain from the fact that despite calls from MP's for the Sales & Purchase agreement to be published in the public interest, there has been no response.

How does 1GDB explain that the China company has announced that it will pay 50% of $5.28 billion when it has proposed to purchase only 40% of BTL's share capital? Are the other local companies and state-owned funds coming up with their proportionate share of cash at all?

Or, are there deals within deals and spongeing BUMNO/SCUMNO Ali Baba's lurking in the shadows to rip us off again and again?

And if there is no fraud, why hasn't PM Grossmajib sued the WSJ for its articles revealing that $2.6 billion flowed through his personal bank account? PM Grossmajib has claimed that he did not personally benefit from the $2.6 billion! But really, do sharks fly or Dracula gag from slurping fresh blood?

Donplaypuks® with simple math, O'serially lying and incompetent PM Grossmajib, 1GDB Chairman, Directors and CEO Arul Kaunda Kundi!