Kuala Lumpur: 1Malaysia Development Bhd (1MDB) is planning to seek another one-month extension on a RM2bil loan to give it more time to sell a stake in its energy unit, sources said.
The state-owned investment company needed more time to repay the debt as it was still in discussions with billionaire T. Ananda Krishnan, Malaysia's second richest person, they said.
Ananda may excercise an option, granted when he sold energy assets to 1MDB in 2012, to buy part of the Edra Global Energy Bhd unit, the people said.
A spokesman for 1MDB declined to comment.
The debts of 1MDB has reached RM41.9bil as of March 2014, according to the firm's annual report. Once it has settled the loan, IMDB plans to list Edra Global in a RM10.8bil initial public offering that would be Malaysia's biggest since Felda Global Ventures Holdings Bhd went public in 2012.
Bank Negara does not comment on individual companies, governor Tan Sri Dr Zeti Akhtar Aziz told reporters in Putrajaya when asked about 1MDB’s debt yesterday.
If granted, it will be the third extension of the loan from Malayan Banking Bhd and four other lenders.
1MDB was given a grace period until the end of January to repay the debt, according to reports.
1MDB built its energy business by buying assets from Ananda and Genting Bhd . It agreed to pay RM8.5bil in 2012 for Ananda's power interests, which included generation plants in Malaysia, Egypt, Pakistan and the United Arab Emirates. Ananda is Malaysia's second richest person with a net worth of about RM33bil, according to the Bloomberg Billionaires Index.
1MDB appointed Arul Kanda Kandasamy, the former investment banking head at Abu Dhabi Commercial Bank PJSC, as president earlier this month. Kanda said in a Jan 6 interview that 1MDB is embarking on a strategic review of operations.
The company redeemed a US$2.32bil (RM8.35bil) investment in a Cayman Islands fund, it said in a Jan 13 statement. — Bloomberg