1MDB secures second extension on US$1.9b bridge loan

KUALA LUMPUR/SINGAPORE: State investor 1Malaysia Development Bhd (1MDB) has won a six-month extension on a US$1.9 billion (RM6.1 billion) bridge loan, giving it more time to launch a planned initial public offering (IPO) of its power assets to cut debt, people familiar with the matter said.
The IPO, which aims to raise as much as US$2 billion and is seen as critical to reducing the fund's debt load, is now expected in the second half of this year, the people said.
Bankers had initially said the IPO could come by mid-year, but it has been pushed back due to delays related to a tender to build a coal-fired power plant that it ultimately won, as well as delays in publishing its financial accounts after a change in auditors.
It is the second six-month extension on the loan for 1MDB, whose advisory board is chaired by Prime Minister Datuk Seri Najib Abdul Razak. The RM6.1 billion loan from Maybank Investment Bank Bhd, is now due in November, said the people, who declined to be identified as the matter is private.
Shahriza Embi, senior vice-president of corporate communications at 1MDB, said in an email that the company would not comment on the matter.
Maybank did not reply to an email seeking comment.
In its IPO, 1MDB is expected to bundle 15 power plants it bought over a two-year shopping spree in a bid to a capitalise on growing electricity demand in Malaysia, the Middle East and South Asia, as well as the greenfield US$3.6 billion 2,000-megawatt coal-fired plant that it won the tender for in February.
It had total borrowings of RM36.2 billion at the end of March 2013, according to its latest financial accounts filed with the Companies Commission of Malaysia. – Reuters