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What will 1MDB’s US$1b Abu Dhabi lifeline cost Malaysia?

Pua: What will 1MDB’s US$1b Abu Dhabi lifeline cost Malaysia?

KUALA LUMPUR, May 30 — The conditions of the US$1 billion (RM3.6 billion) 1Malaysia Development Bhd (1MDB) will get from two Abu Dhabi firms must be stated to allay fears that the lifeline will come at Malaysian taxpayers’ expense, DAP’s Tony Pua demanded.

According to the Petaling Jaya Utara MP, this was particularly since 1MDB’s two saviours — Abu Dhabi’s International Petroleum Investment Company (IPIC) and its Aabar Investments unit — previously extracted an “exorbitant price” for financially backing of the Malaysian firm.

Pointing out that IPIC had demanded 40 per cent of a US$3.5 billion bond as a deposit in return for guaranteeing its issue in 2012, Pua said the terms were so lopsided that 1MDB “might as well have gone to loan sharks to raise the funds”.

“The US$1 billion payment would not have come for free, and would have had plenty of conditions attached to it. What are these conditions?

“Did 1MDB sacrifice even more of Malaysians’ future taxpayers’ funds to secure this desperate loan?” Pua said in a statement yesterday.

Beyond the 40 per cent deposit, he also pointed out that Aabar had been given the option to buy 49 per cent of 1MDB’s Powertek Investment Holdings (PIH) and 1MDB Energy (Langat), which necessitated 1MDB to pay between US$250 million and US$1 billion to terminate.

The federal lawmaker added that these initial deals contributed in no small part to the current financial troubles at 1MDB, which is under pressure to repay a US$975 million loan that a consortium of German banks may recall early after alleging the Malaysian firm breached a covenant of the loan.

Failure to repay the loan would have put 1MDB at risk of a cross default for the rest of its RM42 billion in debt.

“Despite the less than pleasant experience above, today we hear the second finance minister proudly announcing that IPIC is extending another US$1 billion to assist 1MDB to repay part of its mountain of debt,” Pua said.

“He must immediately provide full disclosure on what this US$1 billion ‘assistance’ is going to cost 1MDB, the Malaysian government and the long-suffering taxpayers.”

…more
Pua: What will 1MDB’s US$1b Abu Dhabi lifeline cost Malaysia?
May 30, 2015 – MMO

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