KUALA LUMPUR (Nov 17): 1Malaysia Development Bhd (1MDB) has given an assurance that all its investments are prudent and professionally managed, according to a Bernama report.

"Some of the loans are long-term in nature but we believe this financial commitment can be met. We are also in the process of adding and unlocking value to the assets that we have acquired," 1MDB chairman Tan Sri Lodin Wok Kamaruddin told reporters today.

Dispelling misconceptions about 1MDB's ability to repay loans, Bernama reported Lodin as saying that 1MDB is looking at restructuring its loans to address the mismatching long-term investment projects and short-term loans.

He said its ventures in the Tun Razak Exchange (TRX) and Bandar Malaysia projects as well as in the energy sector, were long-term in nature with long-term gestation periods.

The group registered a loss of RM665.3 million in the financial year ended March 31, 2014 (FY14), mainly due to staggering finance costs of RM2.4 billion, compared with RM1.6 billion the previous financial year.

"1MDB consolidated Jimah Energy's assets for FY2014, expanded positively its real estate operations, resulting in increased operating expenses and financing cost," said Lodin in the Bernama report.

The value of the group's asset base increased to RM51.4 billion compared with RM44.6 billion in FY13, with borrowings rising from RM36.2 billion to RM41.9 billion.

Its total revenue increased by 50% to RM4.3 billion this year from RM2.6 billion, reflecting the quality of the portfolio of assets that is being built and the strength of revenue generation.

Lodin stressed that the investments parked in Cayman Island was legal through its subsidiary, Brazen Sky Ltd for tax reasons and US dollar debt settlement.

"Cayman Island is considered a tax haven. We had been informed that it is appropriate for us to have a company registered in Cayman Island and for us to have the fund placed with this company.

"This is just a temporary process, because you must remember this fund was initially invested in a joint venture with another party," he added.

He said as at March 31, 2014, 1MDB assets and liabilities stood at RM51.4 billion and RM48.9 billion respectively. 

To date, 60% or about RM4 billion of the fund has been liquidated for various settlement of 1MDB's financial commitment and the company is on track to liquidate the remaining 40% by year-end.