1MDB confident of signing three agremments by year-end

1MDB confident of signing three agremments by year-end

KUALA LUMPUR, Oct 28 — 1Malaysia Development Bhd (1MDB) is confident of signing three agreements to sell its power assets, land and equity by year-end which will raise funds to help resolve its RM42 billion debt significantly.

“The sum total of these three transactions can result in 1MDB’s RM42 billion being reduced or repaid over time,” President and Group Executive Director Arul Kanda Kandasamy said.

1MDB expects to rake in RM16 billion from the sale of equity in Edra Global Energy Bhd, RM16 billion from the debt equity swap with Abu Dhabi wealth fund International Petroleum Investment Company and RM10-RM11 billion from the sale of land and equity in Bandar Malaysia.

“Of course, the cash will come over time as usual. In terms of legally binding agreements, our target is to complete them by the end of the year,” said Arul Kanda in a special programme titled “Bernama TV with Arul Kanda” hosted by Suriati Sanusi and co-hosted by Deputy Editor-In-Chief, Bernama Economic Service, Mikhail Raj Abdullah.

The programme would be aired on Astro 502, HyppTV 410 and www.bernama.com. at 10 pm tonight.

Arul Kanda said over 80 per cent of its debts were long-term in nature, while the short-term debts could be managed through proceeds from the sale of Edra Energy.

“If you talk to me by the end of month, by then, we’ll be able to reveal the outcome of our sales process of Edra Energy,” he said when pressed whether 1MDB would be able to get a good price from Tenaga Nasional Bhd (TNB) as power purchase agreements of independent power producers would expire in a relatively short time.

As a result, analysts had said TNB should not pay more than RM8 billion for the power assets.

Arul Kanda said that 11 interested parties were keen to purchase equity in Edra Energy and 1MDB had narrowed it down to three bidders who have submitted final and binding proposals including TNB, as well as, two other foreign entities.

Currently, Edra Energy’s power plants were up and running, generating a revenue close to RM5.0 billion, he said.

Arul Kanda said 1MDB has also sold RM1.3 billion worth of land in the Tun Razak Exchange (TRX) this year.

He said major plots of land were sold to Indonesia’s leading property developer, Mulia Group, as well as, Affin Bank, Lembaga Tabung Haji and its joint venture partner, Australia’s listed property developer, Lend Lease.

1MDB, the master developer of TRX, spent close to RM3.0 billion for infrastructure development which included direct connections to highways from the area, he said.

The Mass Rapid Transport (MRT) station which would be built at TRX would be the biggest among the seven underground MRT stations along the Sungai Buloh-Kajang route and would later be extended to Serdang and Putrajaya.

Arul Kanda said the government has provided tax incentives for companies to locate in TRX which was projected to emerge as an international financial district for Kuala Lumpur.