Public funds “have been used and still need to be used” to repay 1MDB’s debt.
The government faces a RM17 billion shortfall to repay 1MDB’s total outstanding debt of RM38.8 billion, said finance minister Tengku Zafrul Aziz.
He said a total of RM13.3 billion of 1MDB’s debt has been repaid so far, leaving a balance of RM38.8 billion.
While money from the recovery of 1MDB’s assets has been deposited into the ministry’s Assets Recovery Trust Fund, it only has RM15.76 billion, which is not enough to settle the amount, he said.
“Taking into account the expected settlements of RM515 million and US$954 million from AmBank and Goldman Sachs, the government still has a shortfall of RM17 billion, which is needed to settle 1MDB’s outstanding principal and interest of RM38.8 billion during the period of 2023 to 2039,” he told the Dewan Rakyat today.
Tengku Zafrul said public funds “have been used and still need to be used” to repay 1MDB’s debt, and the ministry and Ministry of Finance Incorporated forked out more than RM10 billion to assist the troubled sovereign wealth fund from April 2017 to November 2021.
1MDB’s principal debt comprises the 1MDB Energy Ltd bond issued at RM7.35 billion, 1MDB Energy (Langat) Ltd bond issued at RM7.35 billion, 1MDB Global Investment Ltd bond issued at RM12.6 billion, and the 1MDB Islamic Medium Term Note sukuk worth RM5 billion.
He said the early redemption of these bonds was a complex legal issue, which also required approval of the bond holders, and the government would lose out because of higher exchange rates and interest rates.
“The government will continue to ensure 1MDB debts are repaid in the set time to prevent defaults, which would cause the country serious financial implications as these debts are guaranteed by the government,” he said.
Tengku Zafrul had been asked to clarify the issues by Ong Kian Ming (PH-Bangi), who noted that former prime minister Najib Razak recently claimed that the government has never repaid any of 1MDB’s principal debt with public funds and that it could save money on interest if 1MDB’s bonds could be redeemed ahead of schedule. – FMT