The Malaysian Insight

PUTRAJAYA still needs to repay RM17 billion to settle 1Malaysia Development Bhd’s (1MDB) debt of RM38.8 billion from 2023 to 2039, said Finance Minister Tengku Zafrul Tengku Abdul Aziz.

As such, he added, the government still needs to use public funds or the 1MDB asset recovery fund for payment purposes.

“Taking into account the expected settlements of RM515 million and US$954 million (RM4.1 billion) from AmBank and Goldman Sachs, respectively, the government still has a RM17 billion shortfall,” he told Parliament today.

“This amount is needed to settle 1MDB’s outstanding principal and interest of RM38.8 billion from 2023 to 2039. Public funds were and are still being used to repay the debt”.

He said the government is forced to provide advances and loans totalling more than RM10 billion to the Finance Ministry for this purpose.

Currently, Putrajaya has paid off RM13.3 billion of 1MDB’s debt, leaving a balance of RM38.8 billion.

Tengku Zafrul’s statement essentially denies Najib Razak’s (Pekan-BN) previous claim that 1MDB’s debt is not paid using public funds.

The sovereign investment firm’s major debt consists of a RM12.6 billion 1MDB Global Investment Ltd bond, RM7.35 billion 1MDB Energy Ltd bond, RM7.35 billion 1MDB Energy (Langat) Ltd bond, and RM5 billion 1MDB Islamic Medium Term Note Sukuk.

Tengku Zafrul said the early redemption of these bonds is a complicated legal issue that requires bondholders’ consent, adding that the government will lose money due to rising exchange and interest rates.

“The government will continue to ensure the debt is repaid in the set time period to prevent defaults, which will cause the country serious financial implications as the debt is guaranteed by the government.” – March 14, 2022.