KUALA LUMPUR: Tangible action taken by 1Malaysia Development Bhd (1MDB), under its rationalisation plan, will significantly reduce the company’s debts and ensure long-term sustainability.
As reflected by the number of initiatives that are currently underway, 1MDB is focused on and making good progress with the implementation of the rationalisation plan.
“Tangible actions by 1MDB will significantly reduce debt and ensure the long-term sustainability of our three core assets, namely TRX, Bandar Malaysia and Edra Global Energy,” said a 1MDB statement to update its rationalisation plan.
Concurrently, the company added that it was fully cooperating with and providing information to lawful authorities which were carrying out investigations in a professional and thorough manner.
The government-owned strategic development company commenced a review in January 2015, which recognised a need to consolidate activities of the company, enhance corporate governance and monetise assets to reduce debt.
An immediate outcome of the strategic review was the execution of a joint venture in March 2015 with Lend Lease of Australia to develop 6.8 hectares out of 28 hectares of land in the Tun Razak Exchange (TRX).
1MDB has also taken a number of concrete steps to reduce the company’s debt and ensure that maximum value was generated.
Among others, on June 8, 2015, it completed the repayment of a US$975 million loan (about RM3.6 billion).
This was on the back of a binding term sheet agreement with International Petroleum Investment Company that will ultimately result in a reduction of approximately RM16 billion of 1MDB’s debt.
On June 30, 2015, 1MDB announced its intention to appoint an independent real estate consultant to help review expressions of interest received for the company’s land parcels in Air Itam and Pulau Indah.
Separately, as announced by the independent real estate consultant, CH Williams Talhar and Wong, 1MDB received expressions of interest from over 40 local and international parties to be development partners for the company’s 194.4 hectare Bandar Malaysia project.
In addition, 1MDB also received indicative, non-binding offers from a number of local and international parties in relation to the monetisation process of its investment in Edra Global Energy Bhd. --BERNAMA