MALAYSIA Tanah Tumpah Darahku


Sunday, May 31, 2015

1MDB's US1Billion "Band Aid" Fix : From Arab Ah Long ?

This is from the Malay Mail Online here
What will 1MDB’s US$1b Abu Dhabi lifeline cost Malaysia?
1MDB has been dogged by negative publicity over its finances and debt, and most recently cash flow problems that saw it struggle to meet a RM2 billion loan payment.

KUALA LUMPUR, May 30 — The conditions of the US$1 billion (RM3.6 billion) 1Malaysia Development Bhd (1MDB) will get from two Abu Dhabi firms must be stated to allay fears that the lifeline will come at Malaysian taxpayers’ expense

this was particularly since 1MDB’s two saviours — Abu Dhabi’s International Petroleum Investment Company (IPIC) and its Aabar Investments unit — previously extracted an “exorbitant price” for financially backing of the Malaysian firm.

IPIC had demanded 40 per cent of a US$3.5 billion bond as a deposit in return for guaranteeing its issue in 2012

terms were so lopsided that 1MDB “might as well have gone to loan sharks to raise the funds”.

“The US$1 billion payment would not have come for free, and would have had plenty of conditions attached to it. What are these conditions?

“Did 1MDB sacrifice even more of Malaysians’ future taxpayers’ funds to secure this desperate loan?” 

Beyond the 40 per cent deposit, Aabar had been given the option to buy 49 per cent of 1MDB’s Powertek Investment Holdings (PIH) and 1MDB Energy (Langat), which necessitated 1MDB to pay between US$250 million and US$1 billion to terminate.

these initial deals contributed in no small part to the current financial troubles at 1MDB, which is under pressure to repay a US$975 million loan that a consortium of German banks may recall early after alleging the Malaysian firm breached a covenant of the loan.

Failure to repay the loan would have put 1MDB at risk of a cross default for the rest of its RM42 billion in debt.

“Despite the less than pleasant experience above, today we hear the second finance minister proudly announcing that IPIC is extending another US$1 billion to assist 1MDB to repay part of its mountain of debt,” 

“He must immediately provide full disclosure on what this US$1 billion ‘assistance’ is going to cost 1MDB, the Malaysian government and the long-suffering taxpayers.”

Husni announced that the payment secured from IPIC and Aabar is part of the rationalisation plan he presented to the Cabinet 

Tun Razak Exchange and Bandar Malaysia projects will be spun off from 1MDB into autonomous companies

both Abu Dhabi firms may enter additional “transactions” with 1MDB and remove another RM16 billion from its reported RM42 billion debt pile.

- See more at: http://www.themalaymailonline.com/malaysia/article/pua-what-will-1mdbs-us1b-abu-dhabi-lifeline-cost-malaysia#sthash.4mhNrYVX.dpuf

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