From The Star

ETALING JAYA: 1Malaysia Development Bhd (1MDB) has raised the required capital for its new strategic economic initiatives between Malaysia and Abu Dhabi.

It said in a statement yesterday that the capital was an integral part of the government-to-government collaboration between Malaysia and Abu Dhabi on a strategic partnership that was sealed last month.

“Both countries are committed to now kick-start the operations of this strategic RM18bil partnership. 1MDB opted for a private placement to ensure the timely completion of this economic initiative,” it added.

Through the 50:50 joint venture company, Abu Dhabi Malaysia Investment Company (ADMIC), 1MDB and its partner Aabar Investments PJS will leverage on their global resources to drive these initiatives, it said.

“The proceeds from the US$3bil (RM9.3bil) capital raised is being utilised for investments in strategic and important high-impact projects like energy and strategic real estate which are vital to the long term-economic growth of both countries.”

The two companies, 1MDB and Aabar, are Government-owned and supported.

1MDB’s bonds have received an A- rating from rating agency Standard & Poor’s (S&P), which also assigned an axAAA Asean regional scale rating. “1MDB and its Tun Razak Exchange (TRX) could potentially be the first investment by ADMIC,” said 1MDB.

TRX is estimated to generate a gross development value of RM26bil and attract 250 of the world’s leading companies, creating 40,000 new job opportunities for knowledge workers.

“The multiplier effect generated will produce up to 500,000 new jobs, directly and indirectly throughout Malaysia, by the time it is fully completed.” 1MDB has also earmarked US$2.3bil (RM7.1bil), which are proceeds from its 1MDB-PetroSaudi International joint venture, for future investments.

As of financial year 2013, all PSI Murabaha notes have been fully redeemed at a profit.

The proceeds are reinvested in various classes of participating shares in a segregated portfolio company, registered in the Cayman Islands.

Cayman Islands is in the Organisation for Economic Cooperation and Development (OECD) white list of countries (recognised by the OECD) for using international tax standards.

1MDB said it is considering investment opportunities in all of its core sectors, including global expansion.

“With our strategic partners, 1MDB can jointly explore opportunities internationally.

This global platform is useful in forging further collaborations with energy players, such as investors, technology leaders and construction players from Japan, Germany and the Middle East.”

“For instance, Powertek Energy Sdn Bhd provides a launch pad for 1MDB to play a bigger role in the local and foreign energy markets, especially in South Asia and the Middle East.”

1MDB said Powertek is currently the biggest independent power producer in Egypt and Bangladesh and also has a strong presence in Pakistan, Sri Lanka and the United Arab Emirates.

“With the Kuala Langat Power Plant Sdn Bhd, which was recently awarded a 10-year extension to its concession by the Energy Commission after a competitive bidding process, 1MDB is the second largest independent power player in Malaysia.

“The Kuala Langat Plant’s PPA now extends to 2026,” it said.

PHOTO: An artist’s impression of TRX. TRX is estimated to generate a gross development value of RM26

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