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Friday, October 29, 2021

1MDB's outstanding debt at RM32b, RM12.8b paid to service debt


The total outstanding debt of 1Malaysia Development Bhd (1MDB) remains at RM32 billion as of the end of June 2021.

A total of RM12.8 billion of its financial commitments and debt servicing has been paid up via loans and advances from the government or MOF Inc as of September 2021, amounting to almost RM10 billion, as well as utilisation of the Trust Account.

The outstanding balance of the Trust Account, which also earns placement profits (hibah), stood at RM15.3 billion and is currently sufficient to cover 1MDB's obligations up to 2022, said the Ministry of Finance (MOF) in its 2022 Fiscal Outlook and Federal Government Revenue Estimates report released today.

1MDB's overall outstanding financial obligations, composed of both principal (RM32.2 billion) and interests or profits on the debt (RM7.1 billion), amounted to RM39.3 billion.

The now-defunct 1MDB was established as a MOF Inc company in 2009 to spearhead strategic development in the country.

However, its heavy reliance on debt capital and poor corporate governance led to cash flow complications beginning late-2014 and subsequently requiring assistance from the government.

“A total of RM18.2 billion worth of assets linked to 1MDB has since been seized or recovered and placed into the Assets Recovery Trust Account under the custody of the Accountant General's Department,” said MoF.

The assets recovered include the seizure of physical assets and cash as well as cash settlements by related parties with the United States Department of Justice, settlement proceeds from financial institutions and other parties such as audit firms, and cash recovered from individuals and companies.

In addition to the settlement proceeds paid to the government, the former arranger of bond issuances for 1MDB, Goldman Sachs, will assist and guarantee a minimum of US$1.4 billion asset recovery.

- Bernama

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