August 19, 2022

1MDB placed RM12.5bil out with foreign fund managers

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Fund-manager_1901254cFrom The Star

PETALING JAYA: 1Malaysia Development Bhd (1MDB) has placed out a total of US$3.8bil (RM12.5bil) in the hands of overseas fund managers, based on the details of its accounts for the financial year ended March 31, 2013.

The fund, which started in 2009 with a capital of RM5bil raised through government guaranteed papers, had first placed a sum of US$2.318bil with a Segregated Portfolio Company (SPC) registered in Cayman Islands on Sept 12, 2012.

In the latest set of accounts, it has parked US$1.58bil (RM4.9bil) in various investment portfolios through an overseas licensed financial institution.

The money was part of US$3bil (RM9.9bil) that a subsidiary of 1MDB raised in the debt market, thanks to a ‘letter of comfort’ by the Government.

Its unit 1MDB Global Investments Ltd (1MGIL) had raised US$3bil that is to be used as seed capital for the development of the Tun Razak Exchange.

As the detailed development blueprints of the project have not yet been finalised, the money was put into the overseas funds. Once the detailed blueprints are finalised, management intends to liquidate the investment to fund the project.

As for the money parked in the SPC in Cayman Islands, in the accounts for 2012 the US$2.3bil was classified as an investment.

In the latest accounts, it has been classified as an asset ‘available for sale’ with a fair value of RM7.18bil, indicating that the fund wants to dispose the assets in Cayman Islands that has attracted a lot of adverse attention over the last one year.

According to the accounts, the administrator of the fund had engaged independent third party data providers to determine the value the underlying assets of the SPC before arriving at its net asset value.

Based on the details in the financial year ended March 31, 2013, 1MDB has been raising funds to get the property projects in TRX and Bandar Malaysia started.

A subsidiary, 1MDB Real Estate Sdn Bhd (1MDBRE), obtained syndicated term loans of RM2.5bil and US$300mil for the TRX and Bandar Malaysia projects in 2013. In return, the company assigned the rights to the land, title, interest and benefits for both the projects.

All sales and disposal proceeds and other cash flows or income related to the TRX and Bandar Malaysia developments are attributable to 1MDBRE.

In September 2013, subsequent to the end of the 2013 financial period, 1MDBRE fully settled the syndicated term loan facilities.

Later in December 2013, 1MDBRE sold the TRX land to its unit KLIFD Sdn Bhd for RM1.9bil, and the Sungai Besi land to its unit Bandar Malaysia Sdn Bhd for RM4.2bil.

On Dec 20, 2013, 1MDBRE accepted a RM500mil term loan facility to partially finance the relocation works for both projects.

Then in February 2014, Bandar Malaysia partially issued RM1.5bil out of the total nominal value of RM2.4bil under a sukuk murabahah programme with a seven to 10-year maturity period.

The sukuk programme is secured through a memorandum of deposit by its immediate holding company, 1MDBRE over all the shares held in Bandar Malaysia.

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