1MDB settles RM2b loan to Malaysian banks, ahead of due date - Arul Kanda

1mdb

1mdb

-A +A

KUALA LUMPUR (Feb 3): 1Malaysia Development Bhd (1MDB) has confirmed that it has settled the RM2 billion loan owed by its unit to Malaysian banks.

"I can now confirm that 1MDB has settled, in full, a RM2 billion loan owed by an operating subsidiary of ours to Malaysian banks. The loan was settled in advance of the due date, per the terms of the loan facility agreement," its newly-appointed president and group executive director Arul Kanda said in a statemnt today.

"With the settlement of this loan, I reaffirm 1MDB’s commitment to continue meeting all our debt obligations as they become due,” he added.

The Malaysian Insider, quoting sources, reported today that 1MDB settled the RM2 billion loan yesterday with money from billionaire T. Ananda Krishnan, six days before bankers triggered a default.

The repayment of the RM2 billion is for tranche 2 of the RM5.5 billion bridging loan to the relevant banks.

Malayan Banking Bhd provided 58.99% of the RM2 billion loan, while RHB Capital Bhd extended 32.41%. The other lenders are Alliance Investment Bank Bhd (4.06%), Malaysia Building Society Bhd (3.24%) and Hwang DBS Investment Bhd (1.29%).

1MDB's subsidiary, Powertek Investment Holdings Sdn Bhd, took the loan last May to refinance a RM6.17 billion bridging loan taken in 2012 to part finance the purchase of power assets.

The Malaysian Insider had reported that the final deadline for the loan repayment was Feb 18.

1MDB, whose advisory board is chaired by Prime Minister and Finance Minister Datuk Seri Najib Razak, has been heavily criticised for taking on the debt and the difficulty in repaying its loans.

Among its harshest critics are former prime minister Tun Dr Mahathir Mohamad and former finance minister Tun Daim Zainuddin, apart from opposition lawmakers who say its debts are a risk to the country's financial system.

The opposition had queried 1MDB's financial health after 1MDB president and group executive director Arul Kanda Kandasamy told Singapore's Business Times over the weekend that the remaining US$1.103 billion (RM3.91 billion) Cayman Islands funds would not be repatriated back to Malaysia.