By Sharen Kaur
Published in NST on April 5, 2014
Sources said the sovereign fund’s nearterm priority is to repay debt and interest incurred from its acquisitions of several power plants.
1MDB has a bridging loan of RM6.2 billion maturing next month, they said.
The bridging loan was used to finance the acquisition of T. Ananda Krishnan’s power generation business of RM8.5 billion.
The sources said based on the current situation, 1MDB may seek a second extension to repay the loans to Malayan Banking Bhd and RHB Bank Bhd.
Last year, the fund received a six-month extension until May to repay the loans.
According to the sources, 1MDB was planning to list its power assets this year to pay off some of the loans.
“It may not list so soon as it has several issues to resolve, including its financial position. 1MDB is paying high interest rates and fees from borrowing private placement bonds, and this has affected its net profit.
“1MDB was targeting more than RM2 billion in revenue last year. It was quite certain of paying the loans due this year. However, it too has been busy acquiring power assets,” the sources said.
The company’s profit has dipped from RM544.3 million in fiscal year 2011 to RM44.7 million in 2012.
Meanwhile, 1MDB did not confirm nor deny that it will be deferring its initial public offering.
“We have recently issued RFPs (request for proposals) for various services required for the potential listing of our energy assets.
We will be releasing further information in due course,” the official told Business Times.
1MDB has more than RM35 billion of bonds, which include US$6.5 billion arranged by Goldman Sachs, and loans outstanding.
It was planning to raise funds to pay off US$6.5 billion in debt taken to buy power assets and develop its real estate projects.
Besides Ananda Krishnan’s RM8.5 billion power generation business, 1MDB bought Genting Bhd’s domestic energy options for RM2.3 billion, and 75 per cent of the Jimah power plant for RM1.2 billion from the Negri Sembilan royal family.
Last month, it won an estimated RM11 billion deal for the 2,000 megawatt coal-fired power plant project 3B, beating rival YTL Power International Bhd.
Published in NST on April 5, 2014
MATURING IN MAY: Fund’s priority is to repay debt and interest incurred from energy plant buys, say sources
1MALAYSIA Development Bhd’s (1MDB) plan to raise around US$2 billion (RM6.6 billion) from the listing of its energy assets is expected to be delayed further.Sources said the sovereign fund’s nearterm priority is to repay debt and interest incurred from its acquisitions of several power plants.
1MDB has a bridging loan of RM6.2 billion maturing next month, they said.
The bridging loan was used to finance the acquisition of T. Ananda Krishnan’s power generation business of RM8.5 billion.
The sources said based on the current situation, 1MDB may seek a second extension to repay the loans to Malayan Banking Bhd and RHB Bank Bhd.
Last year, the fund received a six-month extension until May to repay the loans.
According to the sources, 1MDB was planning to list its power assets this year to pay off some of the loans.
“It may not list so soon as it has several issues to resolve, including its financial position. 1MDB is paying high interest rates and fees from borrowing private placement bonds, and this has affected its net profit.
“1MDB was targeting more than RM2 billion in revenue last year. It was quite certain of paying the loans due this year. However, it too has been busy acquiring power assets,” the sources said.
The company’s profit has dipped from RM544.3 million in fiscal year 2011 to RM44.7 million in 2012.
Meanwhile, 1MDB did not confirm nor deny that it will be deferring its initial public offering.
“We have recently issued RFPs (request for proposals) for various services required for the potential listing of our energy assets.
We will be releasing further information in due course,” the official told Business Times.
1MDB has more than RM35 billion of bonds, which include US$6.5 billion arranged by Goldman Sachs, and loans outstanding.
It was planning to raise funds to pay off US$6.5 billion in debt taken to buy power assets and develop its real estate projects.
Besides Ananda Krishnan’s RM8.5 billion power generation business, 1MDB bought Genting Bhd’s domestic energy options for RM2.3 billion, and 75 per cent of the Jimah power plant for RM1.2 billion from the Negri Sembilan royal family.
Last month, it won an estimated RM11 billion deal for the 2,000 megawatt coal-fired power plant project 3B, beating rival YTL Power International Bhd.
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