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1MDB completes rationalisation plan as promised - Arul Kanda

1MDB completes rationalisation plan as promised - Arul Kanda
ARUL KANDA: We finally achieved the final piece of the puzzle which is the monetisation of our stake in Bandar Malaysia which includes a total value in terms of debt reduction of up to RM12.35 billion. -Filepix
KUALA LUMPUR: The government's strategic investment arm, 1Malaysia Development Bhd (1MDB), has completed its rationalisation plan within six months, as promised, following the sale of a 60 per cent stake in Bandar Malaysia today.

1MDB President/Group Executive Director, Arul Kanda Kandasamy, said the rationalisation plan presented to the Cabinet on May 2015, has three major components, including the execution of Bandar Malaysia.

"We finally achieved the final piece of the puzzle which is the monetisation of our stake in Bandar Malaysia which includes a total value in terms of debt reduction of up to RM12.35 billion," he told a press conference here today.
Earlier, he represented 1MDB at the signing of a share sale and purchase agreement pertaining to the 60 per cent stake in Bandar Malaysia Sdn Bhd for RM7.41 billion to a consortium comprising Iskandar Waterfront Holdings Sdn Bhd and China Railway Engineering Corp (M) Sdn Bhd.

On the sale proceeds, Arul Kanda declined to comment whether they will be retained by 1MDB or channelled to the Ministry of Finance (MoF).

As part of the rationalisation plan of Bandar Malaysia, Arul Kanda said, there was a consideration for transferring the ownership of the remaining 40 per cent stake to MoF.

"At the moment no final decision has been made. However, it is an option as envisaged under the rationalisation plan," he said.

Meanwhile, Arul Kanda said, as part of the rationalisation plan presented, there was a discussion that ultimately the assets of 1MDB, Tun Razak Exchange and Edra Global Energy Bhd will become stand-alone companies.

He said the plan also saw the execution of two other major components in the rationalisation plan -- debt asset swap with Dubai-based International Petroleum Investment Co, through a binding term sheet for RM16 billion, as well
as the sale of Edra for cash equity and debt transfer worth RM17.3 billion.

As at March 31, 2014, 1MDB’s debt stood at RM42 billion according to its financial audited accounts.