Abu Dhabi-based firms may get 1MDB’s power assets in RM16b deal, veteran newsman claims

KUALA LUMPUR, May 31 — Abu Dhabi-based companies International Petroleum Investment Company (IPIC) and its Aabar Investments unit may receive almost half of the shares in 1Malaysia Development Bhd’s (1MDB) energy subsidiary, Edra Energy, in exchange for the RM16 billion of debt that they will relieve 1MDB of, a veteran journalist said today.

Datuk A. Kadir Jasin wrote on his blog today that sources tell him that IPIC and Aabar may get up to 49 per cent of Edra Energy’s shares when the company is listed or sold through a private enterprise.

“IPIC and Aabar would definitely not inject RM16.4 billion unless they get valuable collateral or shares. It looks like they want shares and not collateral,” Kadir said.

National newswire Bernama reported yesterday that 1MDB would be “wound down” following a deal with IPIC and Aabar, which could relieve the Malaysian state-owned investment firm of RM16 billion in debt, in exchange for a number of “financial assets” and units held in 1MDB’s BSI Singapore account. 1MDB’s operations would then reportedly be transferred to three separate firms.

But Bernama did not elaborate on what those assets would be.

Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah, however, has denied the Bernama report.

1MDB group executive director Arul Kanda Kandasamy also said in a statement late last night that the US$1 billion (RM3.66 billion) that will be made to 1MDB by IPIC and Aabar is not a loan, debt, or bailout, but a payment as part of a business transaction.

Husni had said Friday that IPIC and Aabar will pump in US$1 billion into 1MDB for the firm to pay off a US$975 million loan by June 4.

Kadir also said today that sources close to the Public Accounts Committee (PAC), which is investigating 1MDB, have told him that the debt-laden firm’s situation may be more dire than what is currently known.

“There’s a big possibility that many more banks and local financial institutions could be exposed to 1MDB’s debt crisis, including institutions related to export and import. It’s also rumoured that there is a cheque worth hundreds of millions of dollars that has been switched hands,” he said.

Both the PAC and the Auditor-General are currently investigating 1MDB that is facing a reported debt burden of RM42 billion.