Putrajaya pays 1MDB Langat bond interest of RM208.8m

KUALA LUMPUR (Oct 19): The government has made a payment of US$50.3 million (RM208.8 million) for the interest arising from bonds issued by 1MDB Energy (Langat) Ltd, a wholly-owned subsidiary of 1Malaysia Development Bhd (1MDB).

Finance Minister Lim Guan Eng said the government does not intend to default on any debt obligations entered into by 1MDB, to defend Malaysia’s international credit rating.

“We will make payment as contracted by the previous government. I have always stressed that Malaysia will honour its debt obligations. Malaysia will not be in default, so we want to make the payments, especially this tranche, 1MDB Energy (Langat) Ltd interest payment of US$50.3 million or equivalent to RM208.8 million, we already paid,” he told reporters at the Parliament lobby yesterday.

“We got two other payments more to go, Nov 11 at US$52.413 million, equivalent to RM217.51 million, and finally the Sukuk Islamic Medium Term Note of RM143.75 million on Nov 29.

“These are the interest payments and we will continue to make these payments as I said we will not be in default. Because the result of being in default is that it will deteriorate our international credit ratings,” he added.

Guan Eng also said this year alone, the Malaysian government has to fulfil interest payment of RM1.69 billion for 1MDB.

“At the same time it is also useful to remind Malaysians that this is the price we have to pay because of the 1MDB scandal. This is not a small amount. Question to be asked is what do we get out of this? So the overall scandal involves RM50 billion, what do we get? We get only to be known as champion of kleptocracy,” he said.

“This is a scandal that has hurt Malaysia not only from financial aspect, but also our reputation. The government will continue to take fiscal steps to handle this issue, on repayment of 1MDB debts, we will continue in fulfilling our commitment,” he added.

Guan Eng said the government’s move is to give assurance to 1MDB bondholders.

“So we want to assure bondholders that we will honour these commitments, at the same time we want to tell the world that we have liberated Malaysia from this global kleptocracy, we want to move away from that, we want to join the community of civilised countries, where we respect accountability, transparency, and uphold integrity, so that Malaysia will be free from corruption.

“We have to find (the money to pay), so it is not much fun to be the finance minister where we got to find money to pay for this scandal, where people have robbed the country, and we got nothing out of paying these interest payments,” he said.

This article first appeared in The Edge Financial Daily, on Oct 19, 2018.

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