1MDB’s Edra sale – the math doesn’t add up

Dr M: Exactly how is 1MDB debt reduced by Edra sale?

 Anonymous_1421806811: Although I am not a keen admirer of former PM Dr Mahathir Mohamad, I have to admit what he says make sense.

1MDB paid RM18 billion to acquire the power plants and sold it for RM9.83 billion and suddenly 1MDB debts are reduced by RM16 billion to RM18 billion.

Well, either this is Arulnomics at its best or 1MDB chief Arul Kanda is trying to pull a fast one on all of us. Whatever it is, it is still not giving us much confidence in the management of 1MDB.

Sleepy: My thought exactly – selling assets cheap that were bought expensive to benefit foreigners and to settle 1MDB debts.

Odin Tajué: Mahathir, I daresay your mind isn’t working too well.

The claims made by Arul aren’t for the consumption of people like you and the rest of the urbanites who have brains between their ears. They are meant for the Malays in the kampungs. Those Malays would believe him.

Remember, those Malays form Umno’s vote bank, whereas urbanites with brains between their ears have rejected the party.

So you think his claims don’t make sense. But what you can do about it? Too bad for you, he and PM Najib Razak call the shots.

Mushiro: Only Najib understands Arul’s numbers. 1MDB had bought the power plants for RM18 billion and sold it for RM9.83 billion. And this is 100 percent of its energy assets.

This looks like a clear loss of RM8.17 billion, but Arul claims that they are making money on top of reducing the debt.

Kamalan: If they are not clever enough to understand how corporate world is managed, it’s better they just shut up rather than come out with a statement “we understand there is some real concern among the rakyat on the importance to solve 1MDB problem as soon as possible…”

I have doubts whether they have a clear idea of 1MDB problems.

Justine Gow: It is something like this. In 2014, a company bought a building at RM20 million. This year, in 2015, the company ran into trouble and was RM100 million in debt.

The newly appointed CEO of the company sold the building for RM5 million and used the money from the sale to reduce the debt.

The debt of the company is no doubt slightly less than RM100 million now, but is the company in a better shape now? Is the financial problem of the company now completely resolved?

Does the CEO care that the building bought only last year at RM20 million was sold at a big loss? The answer to all these questions is ‘no’.

As for the reason why the CEO does not care about the loss in the sale of the building, the building and the money do not belong to him.

Clever Voter: Imagine 1MDB as a cash till. The assumptions are cash flow is assured and no one will ever find out.

The cashier unfortunately lacks the technical skills to count and pays out more than earnings because someone has overestimated the cash flow.

But in the cyberworld, everyone knows. So the country has to be silenced and threatened. Mahathir is alone. That’s sad.

Mob1900: Najibnomics following Mahathirnomics – the apprentice learned well after all.

1MDB says critics wrong; it broke even on Edra sale

Odin Tajué: You tell us that out of your RM42 billion debt, RM19.82 billion was denominated in ringgit and RM22 billion was denominated in US dollars.

These figures applied when the dollar was traded at around RM3.2. Say, RM3.3. Right or wrong?

At the time of commenting, the dollar is traded at RM4.27. Say, RM4.3. That means your dollar-denominated debt is not RM22 billion anymore but RM28.7 billion.

Therefore, your total debt is not RM42 billion but RM48.52 billion. This excludes interest to be loaded thereon minus whatever payments you have made, if any.

No, whatever you say, you are sinking. And sinking very fast.

Cinaputra: Excuse me for being dense. What happened to the money allegedly siphoned away into tycoon Jho Low’s account? And have we settled tycoon Ananda Krishnan’s RM2 billion loan to 1MDB?

Good Man: How can we say 1MDB will face bankruptcy if China (CGN) is willing to buy Edra at RM8.3 billion? China knows that the potential of Edra.

1MDB has essentially ‘broke even’ on its investment through an international tender process, despite having to sell its assets whilst under sustained and misleading attacks from the opposition and Mahathir himself.

2Malaysia: Broke even after all these years? I thought the purpose of investments is to make money.

The above is a selection of comments posted by Malaysiakini subscribers. Only paying subscribers can post comments. Over the past one year, Malaysiakinians have posted over 100,000 comments. Join the Malaysiakini community and help set the news agenda. Subscribe now.

These comments are compiled to reflect the views of Malaysiakini subscribers on matters of public interest. Malaysiakini does not intend to represent these views as fact.