MALAYSIA Tanah Tumpah Darahku



Sunday, October 30, 2016

‘China bailout’ of SRC said to be a red herring

Government source says some people out to create a controversy with talk of possible sale of SRC assets.
PETALING JAYA: Speculation about a sale of assets by former 1MDB subsidiary SRC International has been dismissed as “a red herring” by people out to create a controversy.
A government source dismissed speculation in a Singapore news report of a possible China-led takeover of SRC assets to solve its debt probems.
“Why would China necessarily need to bail SRC out just for it to meet a RM600 million principal and interest payment for 2017? This amount could be raised locally or from overseas,” the source told FMT today.
The Singapore Straits Times reported today that Malaysian government negotiators were seeking a China-led takeover of SRC International assets in return for fresh capital that will help finance SRC’s 10-year loan of RM4 billion from Kumpulan Wang Persaraan (KWAP).
But the source said: “This is yet another red herring being thrown by those who want to create a controversy where there is none.”
The Straits Times said SRC pays RM164 million in annual interest to KWAP, but must pay RM660 million next year, and RM964 million in 2018, as it pares down the principal amount.
It quoted a financial executive involved in the corporate restructuring at 1MDB as saying that one option to resolve the debt crisis was the sale of the company’s assets and liabilities.
But the source said: “It would appear that these individuals are not interested in finding ways to help Malaysia’s economy prosper but would rather come up with any spurious theory to try to bring down the government and country.”
The report, quoting SRC’s 2014 annual report, said the company held RM305.6 million in investments in Malaysia and RM3.8 billion overseas, and had reported a loss of RM164.5 million for the year ended March 2014.
Government-owned investment company might sell off assets to China firms in return for fresh capital, according to Singapore report.

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