KUALA LUMPUR: Some 40 interested parties, including local government-linked corporations (GLCs) and foreign state-owned investment firms, have submitted proposals to participate in the development of Bandar Malaysia, a property project wholly owned by 1Malaysia Development Bhd (1MDB).

According to CH Williams Talhar and Wong (WTW), the transaction advisor for 1MDB Real Estate Sdn Bhd (1MDB RE), apart from the locals there are also interested investors from Singapore, China, Japan, South Korea and Australia.

1MDB RE is a unit of 1MDB which oversees the development of Bandar Malaysia on the 486 acres (196.6ha) of prime land where the former Sungai Besi air force base was located.

The expression of interest (EOI) for Bandar Malaysia closed last Friday. When contacted, WTW deputy managing director Danny Yeo said yesterday that all interested parties have submitted the required documents.

When asked if all the 40 interested parties need to have proof of bank financing in their proposals, Yeo noted that it is not a requirement.

“As per our teaser, we look at profit and loss, cash flow position, gearing ratios and so on.

“We do not ask for proof of bank financing for this purchase (Bandar Malaysia) as it would not be reasonable and too premature (at this point),” he said.

In the booklet to invite interested parties, 1MDB RE stated that qualified investors keen to participate as development partners for Bandar Malaysia are required to provide relevant documents including a company profile, company track record, company paid-up capital and financial report.

Bandar Malaysia and Tun Razak Exchange, which are less than a 30-minute drive from each other, are the two large parcels of land injected into 1MDB — an investment body wholly owned by the Ministry of Finance.

The kick-start of the development at Bandar Malaysia is part of cash-strapped 1MDB’s efforts to monetise its assets to service its RM42 billion debts.

The strategic investment fund incurred interest expense of RM2.4 billion for the financial year ended March 2014 (FY14) and RM1.6 billion in FY13.

Unfortunately, 1MDB’s operating profit was not sufficient to cover the interest expenses and that resulted in the tight cash flow problem it is facing now.

The investment fund is currently under investigation by the parliamentary Public Accounts Committee as its dealings, which have built up over RM40 billion in borrowings, have raised public concern.

Shortlisted pre-qualified investors will then receive the Investment Memorandum that will detail Bandar Malaysia’s development vision and its proposed master plan, according to a statement issued by WTW.

“We have not evaluated (the proposals) as this is in the process. Those who meet the required criteria will be shortlisted for 1MDB board’s final approval for the next stage,” Yeo said.

“Following the EOI stage, WTW will undertake the first stage of evaluation,” he said.

This article first appeared in The Edge Financial Daily, on July 14, 2015.