“The starting point of any net equity value calculation is the land sale valuation of RM12.35 billion, of which the Consortium’s 60 per cent share equates to RM7.41 billion. This is the basis upon which the 10 per cent deposit of RM741 million has been calculated and agreed upon by all parties.”
During the completion period, conceded the company, adjustments may be made to the RM7.41 billion land sale valuation, depending on whether or not certain Bandar Malaysia related liabilities can be passed to the Consortium e.g. the remainder contract costs for relocation of the existing facilities and the Bandar Malaysia sukuk debt.
1MDB was commenting on certain quarters attacking the RM7.41 billion land sale valuation contained in the recent announcement on the successful Share Sale and Purchase (S&P) Agreement executed with the IWH-CREC Consortium for 1MDB to sell 60 per cent of the equity in the Bandar Malaysia project. “These appear to be last ditch attempts by members of the Opposition to undermine the company’s rationalization process.”
The agreement executed between the parties on 31 December 2015, added the company, provides for a robust and objective mechanism to determine, amongst others, matters to which all parties have committed. “1MDB is focused now on taking the necessary steps and to procure the relevant consent in order to implement the legally binding agreements executed in 2015 for the sale of Edra, the debt for asset swap with IPIC and the sale of 60 per cent equity in the Bandar Malaysia project.
The company intends to issue further updates in due course.