1MDB redeems full US$2.3 billion funds

PETALING JAYA: 1Malaysia Development Bhd (1MDB) has redeemed the full US$2.32 billion (RM8.28 billion) invested by the company in a Cayman Islands registered fund, said its president and group executive director Arul Kanda.
"Following a commitment made by the chairman of the board of directors in a statement dated Dec 23, 2014, 1MDB can confirm that it has now redeemed in full the US$2.32 billion invested by the company in the Cayman Islands," Arul said in a statement yesterday.
He said the funds originated from the repayment of a loan provided to PetroSaudi in 2011 in the form of Murahaba notes, following the termination of an earlier agreement to enter into a joint venture with the company.
"The notes, which were paid back in full-with interest, were subsequently invested in a fund under the regulatory supervision of the Cayman Monetary Authority," Arul said.
1MDB had previously redeemed US$1.22 billion, representing 60% of the funds invested, and has now redeemed an additional US$1.1 billion, representing the remaining balance of the total US$2.32 billion that was originally invested.
"1MDB hopes that the redemption of these funds, in full, draws a line under this matter," said Kanda.
1MDB previously said that the money parked in the Cayman Islands would be brought back to Malaysia by Dec 31, 2014.
However, Arul explained that 1MDB missed its stated timeline to repatriate billions of ringgit parked in the Cayman Islands due to the magnitude and complexity of the funds.
The issue over 1MDB's Cayman Islands accounts was raised by several parties, including opposition lawmakers who had expressed concerns that the money would "disappear".
In a statement in April last year, 1MDB clarified that the allegations were baseless and were an election ploy by certain quarters.
Last week, the sovereign fund was reported to have failed for the second time to repay a loan of about RM2 billion to local creditors.
1MDB was said to have missed its Dec 31, 2014 deadline for settlement of the loan, and had received an extension up to Jan 30, 2015 to settle the outstanding payment.
The RM2 billion amount was part of an RM5.5 billion debt taken through its subsidiary Powertek Investment Holdings Sdn Bhd in May 2014 to refinance a RM6.17 billion bridging loan taken in 2012 to part finance the purchase of power assets.
Maybank has 58.99% of the RM2 billion loan while RHB has 32.41%. The other lenders are Alliance Investment Bank Bhd (4.06%), Malaysia Building Society Bhd (3.24%) and Hwang DBS Investment Bhd (1.29%).
1MDB's loan with Maybank and RHB was first due on Nov 30.