STATE investment fund 1Malaysia Development Bhd (1MDB) has achieved near “break even” on its energy investments and is not an empty vessel as claimed.

In a statement directed at Petaling Jaya Utara MP Tony Pua, 1MDB said it will also have a surplus of RM3 billion generated over time after the sale of TRX, Bandar Malaysia, Pulau Indah land and Air Itam land.

“In consideration for the transfer of, amongst others, TRX, Bandar Malaysia, Pulau Indah land and Air Itam land (to the Ministry of Finance), 1MDB will receive payments, over time.

“Those payments, along with asset monetisation proceeds, will be used to meet the principal and interest on the remaining obligations of 1MDB, which primarily comprise long-term bond and sukuk debt, totalling approximately RM32.5 billion at present exchange rates and not the RM40 billion figure wrongly quoted by Pua,” said 1MDB.

It said the details of the transaction is already in the Public Accounts Committee (PAC) Report on 1MDB dated April 7, 2016.

1MDB sold off some of its assets to MoF following the PAC recommendations.

“The information was presented to PAC (of which Pua is a member) and provides details of projected future cash-flows relating to the 1MDB rationalisation program, which shows a surplus of approximately RM 3 billion being generated over time.

“Accordingly, with appropriate stewardship and competent development of the real estate under MOF Inc and monetisation of other assets, it is highly likely that over time, there will be a surplus generated, whether at the 1MDB level or at the level of its 100% shareholder, MOF Inc,” 1MDB added.

1MDB, which is the subject of several investigations in the United States, Switzerland, Singapore and Hong Kong, said it also expects to “break even” after disposing its energy assets, Edra Power Holdings Sdn Bhd, to China General Nuclear Power Corp (CGN).

The beleaguered company, which was once headed by Prime Minister Najib Razak, said Pua had misled the public by saying 1MDB’s RM12.1 billion investments in the power sector resulted in multi billion ringgit losses when 1MDB disposed of its energy interest to CGN for RM9.3 billion.

“Not only are the figures quoted by Pua completely wrong, he conveniently fails to mention that, whilst the gross purchase consideration was RM12.05 billion, the companies acquired had RM1.63 billion of cash on balance sheet, which resulted in a net purchase consideration of approximately RM10.42 billion.

“Furthermore, over the period of ownership, approximately RM2.18 billion was generated in dividends, which were largely used to pay interest on the acquisition debt.

“Accordingly, when the cash, dividends and other costs/impairments are taken into account, upon the sale to CGN at RM9.83 billion cash (not RM9.3 billion as claimed), 1MDB achieved near ‘break even’ on its energy investments.”

Pua had said yesterday that 1MDB is currently an empty shell with nothing other than RM40 billion of debts. The DAP national publicity chief was responding to Najib’s remarks on Tuesday that 1MDB is on track to realise a profit. – October 26, 2017.