Malaysian govt approves standby credit facility of $355m for 1MDB

Malaysian govt approves standby credit facility of $355m for 1MDB

The Government has approved a standby credit facility of RM950mil (S$355 million) for 1Malaysia Development Board (1MDB), of which RM60mil has already been utilised.

Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said the Cabinet had approved the faci­lity for 1MDB and clarified that it was not RM970mil as reported by Singapore's The Business Times.

"Firstly, the sum reported is not RM970mil but a standby credit faci­lity of RM950mil, of which RM60mil has since been used," he said when answering a question raised by Rafizi Ramli (PKR-Pandan).

Ahmad Husni denied that there was any further injection of funds into 1MDB.

He acknowledged that the state-owned strategic investment fund had cash flow problems and would proceed with the initial public offering (IPO) of its energy unit to raise funds. He said the proposed IPO exercise was scheduled for September.

"However, it may be carried out between May and July," he said, adding that the move was necessary to ensure 1MDB's long-term cash flow sustainability.

At present, he said that 1MDB had an audited balance sheet value of RM51.4bil in assets, with loans amounting to RM41bil.

Later, a motion by Datuk Mahfuz Omar (PAS-Pokok Sena) to push for the setting up of a Royal Commission of Inquiry for a probe into 1MDB was rejected by the House.

Deputy Speaker Datuk Ismail Mohamed Said said the Public Accounts Committee had already been tasked with investigating the matter.

In a statement issued later yesterday, 1MDB president and group executive director Arul Kanda said having completed a strategic review of the business, the fund had announced on Feb 17 specific plans for each of its key assets.

"The Finance Ministry is fully supportive of these plans and, in its capacity as the 100 per cent shareholder of 1MDB, has provided the company with a standby credit facility to help ensure that it is able to realise maximum value from these plans," he said.

The facility of up to RM950mil is being provided as a loan on commercial terms.

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