1MDB: Asset acquisitions driven by long-term view

KUALA LUMPUR: 1Malaysia Development Bhd (1MDB) today reiterated that it only acquires assets when it is convinced they represent long-term value.

“To suggest that any of our acquisitions were driven by political considerations is simply false,” it said, referring to a recent Wall Street Journal article suggesting that 1MDB had overpaid for the acquisition of its energy assets.

“The fact of the matter is that these claims are a repetition of old allegations that have been driven by political opponents of the government, including former Prime Minister Tun Dr Mahathir Mohamad.

“They have never been substantiated nor supported by evidence, just as Dr Mahathir has never produced any evidence for his claim that RM42 billion was missing from 1MDB, because the reality is that this RM42 billion is debt backed by RM51 billion of assets,” 1MDB said in a statement yesterday.

1MDB said it took a long-term view of value when entering into transactions; not just for the company, but for the country, as befit its 100 per cent ultimate ownership by the Malaysian government.

“The acquisition price we paid was based on this long-term view, as well as advice received from independent valuation advisers, and the prevailing market conditions at the time.

“On this basis, we believe that the value paid upon asset acquisition –- which may have involved a premium in certain instances, as is common when acquiring another business -- is commensurate with the existing and future potential of the assets,” it said.

1MDB said since acquiring the first energy asset in 2012, it has built a leading international independent power producer in South-East Asia.

The portfolio currently comprises 13 power plants in five countries, along with the rights to construct further gas and solarpowered plants.

Today, Edra Energy is the second largest independent power producer in Malaysia, and the largest in Egypt and Bangladesh, with additional operations in Pakistan and the United Arab Emirates, it said.

In total, it has gross installed capacity under management of 6,619 MW with an effective capacity of approximately 5,594 MW, it said.

1MDB drives market-driven initiatives to help transform Malaysia into a thriving economy -– one that is highly competitive, inclusive and sustainable.

It forges international partnerships through jointventures focused on high-impact projects. — Bernama