10
May
15

Minister admits 1MDB debt burdensome

Minister admits 1MDB debt burdensome, Putrajaya to stop all new loans

Datuk Seri Abdul Wahid Omar admitted that the Ministry of Finance’s strategic investment fund 1Malaysia Development Bhd (1MDB) is a burden, given its failure to generate cash flow against its huge debts.

The minister in the prime minister’s department said that 1MDB had taken loans from banks and the capital market to purchase assets, but failed to raise cash flow, causing it to be unsustainable.

“All this while, they have expanded by taking loans from banks and the capital market. They purchased assets, including IPPs, causing their debt to rise to RM4.2 billion as of March 2014.

“So you can imagine the quantum; it is very high and tough,” he said at a forum in Petaling Jaya last night.

Responding to questions posed by the audience, Wahid said that as long as the assets were not able to generate cash flow, 1MDB will fail to be sustainable.

“Unless it can generate cash flow, it will not be sustainable,” he said.

He added that the debt is expected to have an impact on 1MDB and that three strategic steps have been taken to address the problems.

“They have taken strategic steps to re-evaluate the business model and structure, and three decisions have been taken,” he said.

According to Wahid, these included halting all forms of new loans, focussing on the two main projects, namely the Tun Razak Exchange (TRX) and Bandar Malaysia, and to ensure the initial public offering of IPP Edra Energy can take place soon.

…more
Minister admits 1MDB debt burdensome, Putrajaya to stop all new loans
17 April 2015 – TMI

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