1MDB: Ananda to the rescue?


January 31, 2015

1MDB: Ananda to the rescue?

by Reuters/www.malaysiakini.com

Malaysia’s second-richest man Ananda Krishnan will lend 1Malaysia Ananda KrishnanDevelopment Bhd (1MDB) RM2 billion to settle a loan to local banks, two people familiar with the matter said, helping pave the way for a US$3 billion (RM10.85 billion) IPO by the state investor.

The people, who declined to be identified due to the sensitivity of the matter, said Ananda was currently negotiating the terms of the loan with the state firm.

Earlier this month, Reuters reported that Ananda was in talks with 1MDB to become a cornerstone investor in the long-delayed listing of its power assets, which is likely to take place in the first half of this year.

“It is just a plain loan for now. We don’t know for certain how this will translate into an equity stake in 1MDB’s power unit,” one of the people said.

1MDB officials declined to comment. Officials at Ananda’s investment vehicle Usaha Tegas were not immediately available to comment.

1MDB has already twice missed payments on the RM2 billion bridge loan it took from local banks Malayan Banking Bhd (Maybank) and RHB Capital Bhd. That hit its bonds and fuelled broader investor concerns about Malaysia’s economy.

Najib as 1MDB advisorThe state investor, whose advisory board is chaired by Prime Minister Najib Abdul Razak, has been dogged by controversy over its RM41 billion debt pile, hundreds of millions of dollars of revenue earned by Goldman Sachs for handling its bond issues and a perceived lack of transparency.

The company this month hired Abu Dhabi-based MalaysianArul Kandasamy investment banker Arul Kandasamy as its new President, replacing chief executive officer Mohd Hazem Abdul Rahman, who departed less than two years after his appointment amid criticism for leading the company into further debt.

1MDB has said it plans to use funds from the initial public offering of its energy assets to cut its debt and expand its business.

25 thoughts on “1MDB: Ananda to the rescue?

  1. All the Anandas and Aruls together like all the King’s men cannot save Najib from this messy 1MDB Humpty Dumpty situation. And good luck to all investors who subscribe to the IPO and the underwriters. In my view, what is fundamentally rotten cannot be rescued. Any views? Dr. Phua et.al?–Din Merican

  2. Anaconda…..? Two billion bail-out is a ‘ chicken feed ‘ for him ! Anaconda can swallow few pigs or wild boars at the same, one gulp….
    Very soon , he might be wealthier than Tun Dr Mahathir, if not already.
    Come on everyone should already know, with the KLCC Mega project ( which was the old race-course ), he set up the Maxis & the Satelite operations, and then with his left hand, he rocketed the Air Asia industry, and made somebody else , an Air line, that will SWALLOW up E-MAS in no time….

    But I wander if he will ‘ remember ‘ Tun Dr M ? Well, may be, he is trying to show with this 2 billion (bull-shit, just 2 cents for him ), as a repayment for the Anaconda’s hefty ‘ meals ‘ , not in the wilderness, but all the ‘ humans ‘ (the rakyat ) of Malaysia.
    But why stash away all the ‘ billions ‘ in OZ-land ?

  3. If this is true, it is not a favor or service by Ananda. His loan will be subject to iron clad guarantee from the Malaysian Government. There is reason to believe that he wants to get paid for the sale of his power assets to 1MDB. Furthermore,a a prudent and successful investor Ananda won’t put his money in 1MDB. Why should he do that? To save Najib when everyone wants the irresponsible Prime Minister to resign or be thrown out of office by UMNO?

  4. Its amazing no one is making a ruckus out of the revelation of the valuation of the power asset in these negotiation. They bought Powertek at RM8.5b and Ananda can now buy a majority of the power assets for RM2b..BILLIONS in loses and no “segregated fund” portfolio, no billions in illiquid real estate can cover up that hole..

  5. 1MDB: Ananda to the rescue

    Why would Ananda want to rescue unless he is assured that he will
    be repaid with public funds by giving him another public asset/contract/concession at nominal cost?

  6. Puzzled Malay, you might be right that the service would not be free. But then, it’s time for payback in some manner to the Ruling Party. Malaysians of all races are basically grateful at heart. Still, a loan is just that a loan, which needs to be paid back too. So, 1MDB’s life will be slightly lengthened. Cheers to Arul & Ananda.

  7. It makes no difference with all the financial bail-outs.
    Eventually, like most of the losses, the victims are the innocent poor Rakyat with their sweat. They are paying for it.

  8. CEO Emilio Botin of Baneo Santander said this in a talk to young bankers, on the 2008 meltdown, “If you don’t understand an instrument, don’t buy it. If you do not know your customers very well don’t lend them any money. If you do these things, you’ll be a better banker, my son.”

    Were the chaps from Maybank and RHB who mattered at the crucial juncture, young or old (but had lost the fire in the belly on things financial), or, more likely, were they arm-twisted as usual by congenital bullies who believe that they, and only they, own this country and can do what they like with any asset, debt, issue or even person without fear of prosecution in the courts?

    Why have so many people become disgusted and even depressed with what they are forced to read daily?

    I now realise why Iris Murdoch said, “You cannot have both truth and what you call civilization.”

  9. Putting on a non-partisan hat :

    The top priority is to resolve this 1MDB mess without affecting the rest of the Malaysian financial system. Our international credit rating must also be maintained.

    So the new CEO has to take drastic action e.g. no more questionable investments by people who claim they have no connection (or no longer have any connections) with 1MDB. Such as in Hollywood movies or real estate in pricey foreign capitals.

    Realistically, some of the 1MDB costs will ultimately be borne by the tax payer since the government has guaranteed much of its debts. This must be reduced as much as possible.

    Since the government has made some businesspeople very, very rich through special contracts, it would be fair for them to provide public service in return, would it not ? For example, loans at below market rates or with long repayment periods. Or loans repayable through government bonds.

    I’m not a banker but I would say that we must not borrow short term loans at high interest to pay off longer term loans at lower interest rates. Otherwise, the government would be in a “indebted to loan shark” situation.

    I would also argue that a bipartisan NEAC body (with highly respected BN politicians such as Tengku Razaleigh and highly respected PR politicians such as YB Tony Pua and independent academic experts) may need to be formed to take action in support of the new 1MDB CEO.

    In potentially serious situations, there must be an end to denial and partisan politics must be put aside for the good of the country and its citizens.

    It must be remembered that the economic situation can deteriorate very quickly if hot money flows out fast from the country, and this is coupled with speculative attacks on our currency.

  10. Din,
    It seems that Hisham the economist has disappeared from the scene. His views are badly needed. By the way, if only I can find Hunter thompson’s interview with Nixon

  11. Few weeks already Dato, that the lovely Dr Kamsiah and yourself have not put up some weekend selection for us regulars here…. so in line with 1MDB I contribute one song….

  12. Oh yes ! 1MDB is financially sound. Its assets exceeds its liabilities. So says the “so called financial wizards” of 1 MDB.
    But it has no money to service its debt for the third time and now it need some philanthropist to pay for it. So the debts is now transferred from the bank to an individual. Truth will always prevail and only suckers will believe the lies perpetrated over the past few months.

  13. An Anaconda bailout? That must be a fairy tale! For all I know these reptiles have very insatiable stomach. It looks like it will swallow one EXCLUSIVE deal after another?
    God help Malaysia!

  14. looes74,

    Just to share this…

    “…Kissinger made the Gang of Four complete: Agnew, Hoover, Kissinger and Nixon. A group photo of these perverts would say all we need to know about the Age of Nixon.

    Nixon’s spirit will be with us for the rest of our lives — whether you’re me or Bill Clinton or you or Kurt Cobain or Bishop Tutu or Keith Richards or Amy Fisher or Boris Yeltsin’s daughter or your fiancee’s 16-year-old beer-drunk brother with his braided goatee and his whole life like a thundercloud out in front of him. This is not a generational thing. You don’t even have to know who Richard Nixon was to be a victim of his ugly, Nazi spirit.

    He has poisoned our water forever. Nixon will be remembered as a classic case of a smart man shitting in his own nest. But he also shit in our nests, and that was the crime that history will burn on his memory like a brand. By disgracing and degrading the Presidency of the United States, by fleeing the White House like a diseased cur, Richard Nixon broke the heart of the American Dream.”

    Cheers.

  15. @The February 1, 2015 at 10:02 am,

    Ha…haaaa…….Banks may throw good money after bad……..because that good money belongs to the Depositors not the bankers. Ananda…..WILL NOT DO AS THE BANKERS DO.

  16. @ flyer 168,

    More than in agreement with your description of Nixon’s ”…ugly , Nazi spirit ”.
    More so, rather, on the treacherous creation(in abandoning the gold standard) of unlimited paper money of the US Dollars as the world currency that ‘bought’ power, together, dominates and enslaves the world at will and at the expense of every citizenry on this planet who had sweat to support the ever increasingly high expectation of life-style in the US of today.

    The glaring difference is, the Najib’s pseudo Umno leadership and cronies squeeze their own people, the Rakyat of Malaysia.

  17. It there no Bumiputera around to assist 1MDB? Why Ananda Khrisnan – he is a pendatang! RM2 billion – I am sure anyone from Syed Mokhtar to Azman Hashim to Halim Saad to… well even Tajuddin Ramli would have RM2 billion….. using Ananda would make people like PERKASA and ISMA lose their venom…. c’mon Jib, I am sure you can do better than picking Ananda….

  18. Flyer,
    Hunter Thompson is one heck of an eccentric journalist. Not sure Din would ever read his book. Hisham Rais adores them to his bone.In the film “Where the buffalo roam”, Hunter encounter with Nixon is spectacular

    It is true. 2 types of people. Screw Heads and the Doomed. And He is yelling to Nixon

    What is the country doing for the doomed? We should ask Najib the same question.

    Rosmah would answer the famous 3 words

    “Beep” the doomed

  19. http://www.bbc.com/news/world-europe-31082656

    http://www.bbc.com/news/world-europe-31082656

    When you owe the bank(s) money, you have a problem.
    When you owed the bank(s) lots and lots of money, they have a problem !

    Greece under Syriza should just go to cash-rich alternatives such as China
    and step up economic ties with them. No need to kowtow to Germany and its Chancellor with her mania for austerity. Greeks should also seek advice from Rafael Correa who successfully renegotiated Ecuador’s crushing foreign debt.

  20. The Wrath Grapes, you are right on the dot & that’s how the whole thing goes…..why ? Merely to save 1MDB ? which was a misadventure deliberately created from the beginning for selfish, exorbitant ILLICIT gains …..

    Simple example – just one – We the consumers we play with Mobile phones in Malaysia ( 20 million people ?) LIKE children playing with ‘ toys ‘. absolutely not necessary….silly ! – sorry silly example by me.

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