1MDB: Exim Bank loan used for energy business

PETALING JAYA: The US$150 million (RM555 million) loan from Export-Import Bank of Malaysia (Exim Bank) to 1Malaysia Development Bhd (1MDB) was used for the group's energy business, said 1MDB.
Its president and group executive director Arul Kanda Kandasamy said in a statement yesterday that the loan proceeds were utilised per the terms of the agreement, which is to finance the general corporate purposes including but not limited to the working capital requirements, future capital expenditures and equity infusion of the energy business within the 1MDB group of companies.
"I refer to media reports on US$150 million loaned to 1MDB by Exim Bank. It is a well-known fact that the 1MDB group includes Edra Energy (Edra Global Energy Bhd), a leading international independent power producer, with a portfolio of 13 power and desalination plants in five countries," he said.
It was earlier reported that 1MDB had used the loan to buy land in Pulau Indah, Selangor from Tadmax Resources Bhd. In February last year, Tadmax sold 310 acres of land to 1MDB's indirect wholly-owned subsidiary Ivory Merge Sdn Bhd for RM317.33 million cash.
The deal was delayed twice and in December last year, the purchase price was revised to RM294.38 million. Tadmax said in a filing that it expects to complete the deal by June 30, 2015.
DAP national publicity chief Tony Pua said Exim Bank's loan to 1MDB, allegedly for land purchase, is an abuse of power as the bank is not mandated to provide loans for domestic property purchases.
Pua also called the deal a "double bailout" as Tadmax was also suffering losses and the deal would have eased the company's debt burden.
In a statement issued on Wednesday, Pua questioned the government's move in providing a letter of support for the US$150 million loan which was more than double the RM262 million outstanding amount payable to Tadmax for the property purchase.
Meanwhile, Deputy Finance Minister Datuk Ahmad Maslan told Parliament on Wednesday that 1MDB did not use the loan to purchase land but had utilised it for the maintenance and upgrading of energy plants overseas.
Exim Bank is owned by the Finance Ministry and was established to promote reverse investment and export of strategic sectors including capital goods, infrastructure projects, shipping, value-added manufactured products and to facilitate the entry of Malaysian companies to new markets, particularly to the non-traditional markets.
According to its website, its mandated role is to provide credit facilities to finance and support exports and imports of goods, services and overseas projects with emphasis on non-traditional markets as well as the provision of export credit insurance services, export financing insurance, overseas investments insurance and guarantee facilities.