KUALA LUMPUR, Nov 24 — The federal government's move to restructure the combined RM876 million debt of two companies it owns, Malaysia Debt Ventures (MDV) and Prasarana Malaysia Berhad, into shares is a "bailout", PKR’s Rafizi Ramli said today.
The opposition lawmaker noted that in its parliamentary order paper today, the Finance Ministry had listed two separate proposals to convert MDV's RM400 million debt and Prasarana's RM476 million into government equities and stakes in the companies, which in turn adds on to Putrajaya's contingent liability.
"What the takeover will do is turn the debt into shares... And the debts are completely written off and it is obviously a bailout,” Rafizi told a news conference in the Parliament lobby here.
"If MDV and Prasarana has a good cash flow, there is no need to change loan to equity,” he said.
The Pandan MP claimed that the government was not able now to collect on the money owed but still had to “service” the debts that had piled up in order to continue funding the two companies.
"These are government-linked companies and they have all the help they need... by restructuring their debts you are clearly acknowledging that companies are unable to repay debts until the government had to take over," Rafizi said.
MDV is in the business of loaning money to tech-related companies and start-ups since 2002.
Prasarana, on other hand, manages the country's public transportation system, including RM23 billion MRT Corp Sdn Bhd.
"How is it that even all the help they have received over years, that they are unable to service their loans?" asked Rafizi.
