KUALA LUMPUR: 1Malaysia Development Bhd (1MDB) said it is now undertaking due diligence of shortlisted local and international parties in relation to the sale of its investment in Edra Global Energy Bhd.
In a statement yesterday, 1MDB said it had also received expressions of interest from 40 local and international parties to be development partners for its 486-acre (196.677ha) Bandar Malaysia project here, which are now in a detailed due diligence process.
“Collectively, these tangible actions by 1MDB will significantly reduce debt and ensure the long-term sustainability of our three core assets, namely Tun Razak Exchange (TRX), Bandar Malaysia and Edra Global Energy,” it said.
The strategic development firm noted that it had appointed an independent real estate consultant for monetisation of its land parcels in Bandar Malaysia, Air Itam in Penang and Pulau Indah in Selangor.
1MDB said Tun Dr Mahathir Mohamad’s allegations in his latest blog posting yesterday had been addressed by the company in various statements shared with the media, describing them as “recycled old and unproven”.
In a long posting on his blog chedet.cc, the former prime minister raised concerns about some of 1MDB’s decisions, including paying above market price for its power plants and borrowing money by paying commissions of 10% and interest rate of 5.9%, its joint venture with PetroSaudi International Ltd and its funds in the Cayman Islands, the whereabout of which Dr Mahathir said nobody could be certain of now, saying it was unclear if the money repatriated was in units of assets or cash.
He also recounted 1MDB’s struggle to pay interest on loans and how tycoon T Ananda Krishnan’s help was sought, as well as Putrajaya’s credit line of RM900 million.
“We have explained, on several occasions, our rationale for the price we paid in the acquisition of our energy assets. As we had explained in our statement dated June 30, 2015, 1MDB believes that the value we paid for these assets — which may have involved a premium in certain instances, as is common when acquiring another business — is commensurate with their existing and future potential,” said 1MDB.
“These recycled allegations not only cast aspersions on 1MDB but also impact the day-to-day operations of the company. 1MDB has repeatedly responded to these unfounded allegations by Tun Mahathir as evidenced in our statements on June 10, 16, 18 and 30, 2015,” the company added.
“1MDB would now like to remain focused on the successful implementation of our rationalisation plan, which was presented to the Cabinet on May 29, 2015,” it noted.
The debt-laden company said it has been making progress, beginning with the repayment of a US$975 million (RM3.6 billion) loan and execution of a binding term sheet with International Petroleum Investment Co that will ultimately result in the reduction of approximately RM16 billion of the company’s debt.
This article first appeared in digitaledge Daily, on August 11, 2015.