Thursday 28 Mar 2024
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KUALA LUMPUR (Jan 12): 1Malaysia Development Bhd (1MDB) said the RM2.4 billion proceeds raised from the Islamic bonds (sukuk) issued two years ago by Bandar Malaysia Sdn Bhd (BMSB) have been properly utilised; it was partly used to finance the relocation of defence units from land marked for the 196-hectare Bandar Malaysia development here.

"1MDB confirms that the proceeds raised by BMSB have in fact been utilised in accordance with the terms of sukuk programme agreement (including) to part finance the cost of the Pangkalan Udara Kuala Lumpur (PUKL) relocation project, pre-funding the fees and expenses of the sukuk programme, to fund the requisite financing reserve accounts and for working capital of the then 1MDB Real Estate Sdn Bhd (1MDB RE)," the state-owned strategic development company said in a statement today.

In February 2014, BMSB, a unit of 1MDB RE (now known as TRX City Sdn Bhd), announced that it will issue one- to 10-year sukuk by private placement to unnamed buyers. AmInvestment Bank Bhd was the adviser on the sale of the sukuk.

1MDB was responding to remarks made today by Parti Keadilan Rakyat (PKR) lawmaker Rafizi Ramli that RM1.6 billion of the RM2.4 billion sukuk issued to pay for the relocation of the former Royal Malaysian Air Force base at Sungai Besi here has not been properly utilised.

1MDB also dismissed concerns from Rafizi that a foreign company may be involved in the PUKL relocation project, saying that it will not be the case.

"Perbadanan Perwira Hartanah Malaysia (PPHM), a 100% subsidiary of Lembaga Tabung Angkatan Tentera, is and continues to be, the turnkey contractor to deliver the construction aspects of the PUKL relocation.

"PPHM has, in turn, appointed over 50 qualified bumiputera contractors as subcontractors to deliver various aspects of the construction," said 1MDB.

"PPHM as the turnkey contractor and the over 50 bumiputra subcontractors will continue to remain as the designated contractors and will continue to perform their roles exclusively. These contractors have been approved by the relevant authorities and construction is supervised by relevant officials from the defence and home affairs ministries," it added.

1MDB also pointed out that as the construction will continue to be carried out by the current approved contractors, there is no question of any impact on national security through the sale by 1MDB of its 60% equity interest in the Bandar Malaysia project.

"Having executed legally binding agreements for the three main pillars of its rationalisation plan per the six-month deadline committed by the government, 1MDB is now fully focused on implementing the terms of the agreements and achieving completion," said the company, adding that it commits to issue periodic updates on the progress.

1MDB on Dec 31, 2015 agreed to sell 60% of its stake in BMSB for RM7.41 billion to consortium IWH-CREC Sdn Bhd, which is a 60:40 joint venture between Iskandar Waterfront Holdings Sdn Bhd (IWH) and China Railway Engineering Corp (M) Sdn Bhd (CREC), as part of its rationalisation plan to reduce its debt, reported to be at RM48.36 billion.

 

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