Arul Kanda confident 1MDB debts can be settled within 6 months

Despite the various economic challenges faced by the country including the depreciation of the ringgit, 1Malaysia Development Berhad (1MDB) President and Group Executive Director, Arul Kanda Kandasamy is confident the investment company's debts can be settled within six months.

He said the matter was based on 1MDB's disposable assets including RM16 billion to RM20 billion owned by 1MDB subsidiary company, Edra Global Energy Bhd, RM16 billion from the International Petroleum Investment Company (IPIC) and RM11 billion to RM 12 billion from the Bandar Malaysia economic hub project.

"I am confident that the period given by the Prime Minister is appropriate with the company's situation and also market conditions," he said in an interview onthe 'Soal Jawab' programme on TV3, Wednesday.

He said 1MDB has strong assets as well as local and foreign investors who are interested in long-term investments on 1MDB projects.

"About 40 leading companies from China, Australia and the Middle East have shown interest in the development of Bandar Malaysia," said Arul Kanda.

Arul said 1MDB's debt rationalisation plan will not be affected by the depreciation of the ringgit as it owns US dollar assets.

"We have power companies in foreign countries such as Bangladesh and Egypt where 1MDB is the largest independent power producer in both countries.

"We also have assets in Abu Dhabi and Pakistan and all these assets are funds in the form of US dollars. So we have an advantage, where the cash flow in US dollars has the same value if disposed," he said.

When asked whether the current sentiment will affect the confidence of the investors, Arul said the problem is worrying the investors but the economic situation is also important in implementing the rationalisation plan for reducing the debts.

"1MDB assets are essentially solid and strong enough to convince investors.

"The investors are confident of 1MDB's assets as they have strong fundamentals, for example Edra Energy which earned a revenue of about RM5 billion annually," he added.

Hence, he said the main challenge for 1MDB is to stabilize the company's financial condition and settle its debts, and at the same time generate more income and operations in the future.

On August 9, Prime Minister Datuk Seri Najib Razak said 1MDB's debts will be reduced gradually in the next five months.

Speaking in front of Pasir Gudang UMNO delegates, Najib said the matter had already been disclosed to UMNO members.