This article first appeared in The Edge Financial Daily on September 3, 2019

KUALA LUMPUR: The ministry of finance (MoF) will ensure that a sufficient allocation is made available to settle SRC International Sdn Bhd’s next interest payment of RM43.02 million to the Retirement Fund (Incorporated) (Kumpulan Wang Persaraan [Diperbadankan])(KWAP).

The amount is due on Sept 30 based on the repayment schedule.

Finance Minister Lim Guan Eng said the ministry’s action proves the government’s ability — despite experiencing financial constraints — to manage the financial burden of the scandal involving 1Malaysia Development Bhd and its former subsidiary SRC that was inherited from the previous administration.

In a statement yesterday, Guan Eng said the RM43.02 million is part of the balance sum of RM3.8 billion of the financing facility which will end in 2022.

“Since 2015, the MoF has been committed to ensuring that it discharges its payment obligation, in accordance with the schedule of repayment to KWAP, to avoid any default and to safeguard the interests of KWAP and pensioners,” he said.

Guan Eng said the MoF had so far paid a total of RM1.69 billion in principal and interest on behalf of SRC.

The latest payment, made on Aug 29, totalled RM344.68 million, comprising RM300 million principal and RM44.68 million in interest.

SRC borrowed RM4 billion from KWAP — RM2 billion in August 2011 and RM2 billion in March 2012.

The financing facility is fully guaranteed by the government.