Credit worthy and RM200b GDV

In the disbelief of those who thrives on controversies, scandals, conspiracies and refuse facts, 1MDB actually resolved their financial issues of “Mismatch of asset acquisition and cashflow to serve borrowings”.

The ‘Rationalisation Plan’ which President and Group Chief Executive Director Arul Kanda Kandasamy presented and got Cabinet approval on 29 May 2015, had proven effective to resolve all financial issues clawn into the Group’s coffer as a result of poor commercial decisions.

Slightly less that two weeks ago, 1MDB President Arul already pre-empted that all the financial issues of the strategic investment company fully owned ny Ministry of Finance Inc would be resolved very soon.

The Star story:

Sunday, 27 March 2016

Arul Kanda: 1MDB to announce other debt payments within weeks

PETALING JAYA: 1Malaysia Development Bhd (1MDB) will make announcements on its other debt payments in two to three weeks, says its president Arul Kanda Kandasamy (pic).

He said the 1MDB had not incurred any new debt and would be paying off its current debts.

“In the next two to three weeks, we will be making announcements about us paying our debts,” he said in an interview with Astro Awani.

Arul Kanda said that he was brought into 1MDB to help rationalise the debts of the investment fund, among others.

Among the steps 1MDb would be taking in the future was to avoid adding on to its debts, he said.

“We won’t start any new project. We will increase monitoring of the governance of 1MDB,” he said, adding that another way to move forward was by co-operating with the investigation on the investment fund.

He said that the decisions made about 1MDB were similar to dealing with “a house after an earthquake”.

“The impact is on the structure of the house and the residents are our projects such as Edra (Edra Global Energy Bhd) and TRX (Tun Razak Exchange).

“We have made a choice to ask the residents to move out,” he said, referring to the sale of Edra and the plan to sell TRX.

He admitted that the investment fund was facing several problems but insisted that the issues were purely about business.

“It’s true that there are issues within 1MDB but they are business issues.

“They should not have been politicised,” he said.

Such politicisation of the situations facing 1MDB had caused confusion and anger among Malaysians, he added.

When asked about financier Low Taek Jho, known as Jho Low, Arul Kanda said that he was not related to 1MDB but its predecessor, Terengganu Investment Authority (TIA).

“He left in May 2009 before the Finance Ministry took over TIA and changed it to 1MDB,” he said.

***************

Like a rail service, they did exactly that and on time. In the past two weeks, 1MDB has made a total repayments of RM4.6 billion as part of its successful rationalization plan.

1MDB President Arul Kanda has said the state-owned company will not have any more short-term debt and bank loans after the repayments.

It will have a cash surplus of at least RM2.3 billion after settling the debt.

Media statement on the RM950 million standby credit facility provided by the Government:

REPAYMENT OF RM950 MIL STANDBY CREDIT FACILITY

1MDB Media Statement 8 April 2016 —

1MDB is pleased to announce that its subsidiary, Plenitude Mentari Sdn. Bhd., has repaid in full, all the principal and interest, for the RM950 million Standby Credit Facility provided by its ultimate shareholder, the Government of Malaysia. This facility was entered into on 27 February 2015, further to the strategic review announced on 18 February 2015, as a direct response to the cash-flow mismatch faced by the company.

The Standby Credit Facility helped to stabilise the company, at a time when it was under severe attack from multiple parties and had no other financing options. With the stability, 1MDB and MoF Inc. were then able to develop and implement the rationalisation plan, the success of which has resulted in the Standby Credit Facility being repaid in full.

************

The media statement on the repayment of the Powertek Group acquisition, which is a substantial amount of RM3.0 billion Syndicated Term Loan Facility has been settled.

RM3 BILLION LOAN REPAYMENT

1MDB media statement 1 April 2016

1MDB is pleased to announce that its subsidiary, Powertek Investment Holdings Sdn Bhd, has fully settled the remaining RM3.0 billion balance of an RM3.5 billion Syndicated Term Loan Facility.

The loan facility was entered into in May 2014 with a syndicate of domestic banks, led by Maybank. It has now been fully prepaid, in advance of the original maturity date of May 2024, as part of the successful 1MDB rationalisation plan.

***********

The media statement of the RM700 million syndicated term loan facility:

REPAYMENT OF RM700 MILLION SYNDICATED TERM LOAN FACILITY

1MDB Media Statement 25 March 2016

1MDB is pleased to announce that its subsidiary, Edra Energy (Langat) Sdn. Bhd., has fully repaid an RM700 million Syndicated Term Loan Facility to a consortium of domestic banks, per the terms of the loan agreement.

The loan was first drawn in 2012 to partially finance 1MDB’s acquisition of its energy assets.

This debt repayment and overall debt reduction is a tangible result of 1MDB’s successful rationalisation plan.

**********

Group President Arul and his leadership, very much rationalized, restructured and resolved all the assets of 1MDB Group and served all its financial commitments, with substantial bits to spare.

All these productive moves and progress are made within less than 1year, amidst very intense ‘noises’, especially the incessant political pressure led by none other than Fourth Prime Minister Tun Dr. Mahathir Mohamad and band of motley crew in unbelievable political circus stunts.

This being harped on and hyped up continuously by pro-Opposition and Neo-Con Jewish controlled media, which paints totally far from facts picture about 1MDB and all the unsubstantiated alleged white collar criminal acts within and about the Ministry of Finance Inc. strategic investment company.

Now that the Public Accounts Committee which consist of MPs of both sides of the bench that already convened and investigated the relevant parties of and within 1DMB, with the full authority of His Majesty’s Parliament, the capital matters have been resolved.

The Executive was never involved in the decisions made and operations and implementations executed by the Management. Yet, rumours compounded on the scandals and contentious stories about 1MDB had been lies upon lies, harped on and hyped up.

It was clear from the start it was part of the demonisation of Prime Minister Najib to bring him down. The cash-flow strapped 1MDB Group caused by mismatch and poor aggregation of commercially acquired asset building manoeuvres through borrowings was the best vehicle for the Anti-Najib Campaign to ride and bastardise on.

Everyone had something bad to mud-pelt 1MDB, despite not having the full knowledge and comprehension of the subject matter in totality.

Even at one some few occasions, CIMB Chairman Dato’ Seri Nazir Razak took nasty swipes which include the summary dismissal of CIMB Islamic Bank CEO Badlisyah Ghazali. It was about Badlisyah’s personal opinion on the fake SWIFT codes pertaining to the alleged transfers into bank account of Prime Minister Najib.

Now all of the wounds from the financial claw-back have been resolved, 1MDB as Group is free to move forward.

On plate is the Tun Razak Exchange (TRX), which shall be the most valuable property square mile in the nation and provide very high productivity in Prime Minister Najib’s strategy of taking Malaysia into a high value economy.

Upon completion, TRX is expected to have a gross development value (GDV) of RM 40 billion.

There is still Bandar Malaysia, where 1MDB pass the burden to continue and deliver the mega development of the 486 acres of Bandar Malaysia to the Iskandar Waterfront Holdings – CREC consortium, as the 60% controlling party.

iProperty story quoting the Bernama story:

Bandar Malaysia total GDV estimated at RM160 Billion, says IWH

By The iProperty.com News Team on Mar 22, 2016

KUALA LUMPUR, March 21 — Bandar Malaysia is estimated to involve a cumulative gross development value (GDV) of RM160 billion and will be completed over the next 20 years, says Iskandar Waterfront Holdings (IWH) Executive Vice Chairman Tan Sri Lim Kang Hoo.

Lim said the China Railway Group Ltd (CREC), which acted as a first mover in Bandar Malaysia with its US$2 billion (US$1=RM4.07) commitment to building its regional centre, represents 30% of Bandar Malaysia’s first phase project.

“There will be three phases of development in Bandar Malaysia.

“We will bring in the investors to come in and join hands to develop with us, just like what we are doing in Iskandar Malaysia,” Lim told reporters at a press conference.

CREC President Zhang Zongyan earlier announced that the company would invest US$2 billion to build its regional centre in Bandar Malaysia and would consolidate all its current regional businesses and operations once its new headquarters in Bandar Malaysia is completed.

Zhang made the announcement in the presence of Prime Minister Datuk Seri Najib Razak, Johor Menteri Besar Datuk Seri Mohamed Khaled Nordin and several cabinet ministers at a ceremony here today.

CREC is a Chinese state-owned company and a Global Fortune 500 company which was ranked 71st in 2015.

At the same press conference, Zhang said CREC’s project in Bandar Malaysia will kick off next year and may create up to 10,000 jobs.

CREC’s development blueprint includes an integrated underground city modelled after Canada’s Montreal underground city, with dedicated space for financial and commercial centres, tourism and shopping facilities, high-end corporate offices, theme park and themed theatres, said Zhang.

On the high-speed rail project, Zhang said the company may bid for the project if it is invited to participate in the tender.

The Bandar Malaysia development is being developed under the public-private partnership (PPP) model with the Ministry of Finance holding 40% of the development company and the IWH-CREC consortium holding 60%.

IWH is also a PPP company with the Johor State Government, through Kumpulan Prasarana Rakyat Johor, owning 40 per cent of the company and the remaining 60 per cent by Credence Resource Sdn Bhd, a company controlled by Lim.

Bandar Malaysia is situated at the old airport site in Sungai Besi just seven kilometres from Kuala Lumpur city centre.

— BERNAMA

Read more at http://focus.iproperty.com.my/news/1010/bandar-malaysia-total-gdv-estimated-at-rm160-billion-says-iwh#VXeGgBC1ulI41Yyt.99

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According to IWH, a GDV of RM160 billion could be realised from Bandar Malaysia. The two, would aggregate a whopping RM200 billion in GDV. That is substantial contribution from the MOF Inc. strategic investment company.

That is not withstanding the other parcels of land which 1MDB is holding and could be turned into very productive development project, for each respective areas.

Group President Arul summed everything up quite nicely.

Straits Times story:

My job is done, says chief of embattled 1MDB fund Arul Kanda

Arul Kanda, president of 1MDB, says his job was to turn the fund around and sort out its debt. “From my perspective, I’m done,” he said in an interview.

PUBLISHEDMAR 31, 2016, 12:49 PM SGT

KUALA LUMPUR (BLOOMBERG) – Former investment banker Arul Kanda took a job in Malaysia last year and walked into the crossfire of the country’s biggest political crisis since Prime Minister Najib Tun Razak came to power in 2009.

Now, even as the finances of 1Malaysia Development Bhd. (1MDB) are being investigated in at least three countries, Kanda, president of the government-linked fund, says his job sorting out the organisation is done.

“I only signed up for one-third of what I ended up doing,” he said in an interview on Wednesday (March 30) at the fund’s headquarters in Kuala Lumpur. “I did not sign up for the investigations because that happened after I joined, and I definitely didn’t sign up for the extent of the comms-slash-politics that I had to deal with.”
Mr Kanda was brought in in January 2015 when the debt-ridden fund was teetering on the edge of default. Within months the company became embroiled in allegations of financial irregularities that sparked probes in Malaysia, Singapore and Switzerland.

1MDB, whose advisory board is headed by Mr Najib, has consistently denied wrongdoing.

Kanda echoes statements by Mr Najib and other government officials that the allegations are unfounded and politically motivated. He said 1MDB hasn’t been contacted by any foreign legal authorities to help with investigations.

“The misunderstandings about 1MDB stem from the fact that what was a business problem became politicised and became a tool by the opposition or those not aligned with the government to topple a democratically-elected prime minister and government,” he said. “That’s the reality of it.”

He says his job was to turn 1MDB around and sort out its debt.

“From my perspective, I’m done,” said Mr Kanda, a trained lawyer. “Everything’s signed. Legal agreements are there, they’re binding. I’m leaving the company” with available funds, he said.

1MDB will repay RM6 billion (S$2.07 billion) in the next three weeks, leaving it free of short-term debt and bank loans and with at least 2.3 billion ringgit in the bank, Kanda said.

It announced last week the settlement of a RM700 million syndicated term loan. 1MDB will also sign a term sheet for the development of its land parcel in the state of Penang in about two weeks, he said.

“We don’t need any money from our shareholders to get us to 2039” when the last bonds are due, said Mr Kanda, who signed up for a three-year term at the fund. “There is no bailout of 1MDB.”

Set up by the government in 2009 to build infrastructure with borrowed money, 1MDB amassed about RM42 billion of debt in less than five years, largely from assets in the energy sector.

It started facing cash-flow problems in 2014 after a planned initial public offering of energy unit Edra Global Energy was delayed by an unfavourable market. Kanda raised money to pay the debt by selling assets including Edra, which was bought by China General Nuclear Power Corp. for RM9.83 billion.

Mr Kanda said 1MDB will retain land and assets that will allow it to pay off outstanding bonds. They include the 70-acre Tun Razak Exchange financial district, or TRX, in downtown Kuala Lumpur, named after Mr Najib’s father.

“Why don’t I want to sell it off today and pay off the debt? Because I think it’s going to be worth more over time.”

1MDB’s 2023 notes traded on Wednesday at a level last seen in April 2015, according to Bloomberg-compiled prices. Investors would have gained 30 per cent if they’d bought the securities at their lowest point of 71.6 cents on Oct 2. The bonds were sold at par of 100 cents in March 2013 in a deal arranged by Goldman Sachs Group Inc. and rated at A- or four levels above junk by Standard & Poor’s.

Critics questioned Goldman’s earnings from arranging bond sales for 1MDB in 2012 and 2013. Goldman made about US$593 million from three bond sales that raised US$6.5 billion, according to a person with knowledge of the matter, dwarfing what banks typically make from government deals.

Mr Tim Leissner, then Goldman’s South-east Asia chairman, was an adviser to the state fund from early on, according to a former colleague familiar with the bond sales.

“There were large requirements and Goldman was one of the few firms, in fact the only firm, that could provide the solution that was required,” Mr Kanda said. “Overall the objectives were met.”

Mr Leissner left Goldman earlier this year after questions about the fund, his work on an Indonesian mining deal and an allegedly inaccurate reference letter. His lawyer Jonathan Cogan did not respond to messages. Goldman has previously defended the Malaysia fees as representing its underwriting risks and market conditions at the time.

Still, even after 1MDB pares its assets and debts, allegations may continue to dog Mr Najib as questions linger over US$681 million which appeared in his personal accounts before the last election in 2013.

Malaysia’s attorney-general said the funds were a donation from the Saudi royal family and has cleared the prime minister of any wrongdoing.

The central bank said in October its probe of 1MDB found inaccurate disclosures by the company when it sought approvals for investments abroad, prompting the regulator to revoke the permissions given and instructing the repatriation of more than US$1.8 billion related to multiple deals.

It also proposed criminal proceedings against 1MDB, something the attorney-general dismissed as it concluded there was no wrongdoing.

This month, former premier Mahathir Mohamad filed a lawsuit against Mr Najib, alleging he “actively and deliberately” sought to derail investigations by local agencies into 1MDB, according to a statement by Dr Mahathir’s lawyers.

Mr Najib has denied the allegations.

For his part, Mr Kanda says he’s done what he was asked to do.

“My job is to come in, identify the problem, put together the solution, help” people to stay focused, he said, “I’ve done it, now I need to move on.”

*************

The skeptics and disbelievers may continue to be in their make-belief world of controversies, contentions and scandals but facts are what they are.

Now that ‘Rationalisation Plan’ Group President Arul introduced on 29 May 2016 has been fully executed and the implementation of each projects are on the way, our attention should only be up and ride on all the goodness from the salvaged 1MDB which definitely brought about betterment for Malaysia.

*Updated 1800hrs

Published in: on April 9, 2016 at 13:00  Comments (3)  

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3 CommentsLeave a comment

  1. 1mdb as group free to move forward?

    Did you miss the news? Ceo of 1mdb said it will be an empty shell? So please enlighten us on what you mean by forward? At the end of the day, this was one mess that we all (taxpayers/citizens) could have done without. If all this nonsense never took place, no left pocket to right pocket and numerous re-valuation for subsequent debt purchases, whereby at the end of the day, nothing to show for.

    I find it puzzling at how you think that this is like a “job done” or a miracle performed by the ceo from abu dhabi? My pet hamster could have just scraped and sold off stuffs it got for cheap and use the proceed to service debt?

    This was a bail out. No two ways about it

  2. He’s the PM and Finance Minister at the same time when he coined 1MDB into existence. Then he sort-of, self-elected himself as 1MDB’s Chairman and Adviser.
    Therefore, Najib should be held responsible as Captain of the Ship-yard. This nonsensical ‘gali-lobang, tutup lobang business’ should not have existed, in the first place. His penchants for liaising with dubious middle-man in government dealings are just mind-boggling. Razak Baginda, Deepak Carpet and now Jho Low have left a disgusting foul-stench on UMNO and the government. In-fact, he seems to be making a fool out of KPDNKK’s campaign of ‘Jihad Memerangi Orang-Tengah’.
    If this sort of things were to happen in a Kafir country, he would have been incarcerated a long time ago.

  3. ” my job is done! ”

    True enough. In other words: ” the shit is yours now “


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