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07/01/2016

MORE CONFUSION FROM 1GDB. ANYWAY YOU LOOK AT IT 1GDB WILL HAVE NETT FAR LESS THAN $7.41 BILLION FROM BANDAR TUN LAZAK LAND SALE. WHY MISLEAD THE MALAYS?

by el dorado, Donplaypuks® intrepid correspondent for land scam affairs


CLICK ON LINK BELOW TO BUY BOOK 'MURDERED IN MALAYSIA:THE ALTANTUYA STORY:


A further announcement today by 1GDB (Grossmajib Development Bunkum) that the sale of its 100% owned Bandar Tun Lazak (BTL) land company may be completed through a special purpose vehicle (SPV) adds, not detracts, to the confusion that has reigned supreme over the last week.

Last week, 1GDB and its CEO Arul Kaunda Kundi had announced that a joint venture company (JV) between a China concern and a local company would be buying 60% of the shares of BTL for $7.41 billion. The shares of the JV would be owned 60%:40% as between the China company and the local company.

However, whichever way the deal is structured, it is clear that at the end of the day, 1GDB will have far less than $7.41 billion in its kitty. This is clearly a red-herring to try and fool the public that 1GDB will be able to reduce its gynormous loan debts of $42 billion by a larger amount.

Over and above this $42 billion loan debt which has been bedevilled by accusations of fraud, misappropriation, CBT, money-laundering, mismanagement, abuse of power and self-enrichment by PM Grossmajib who is also the Finance Minister and Chief Asvisor to 1GDB, the MoF absorbed an additional $4 billion of 1GDB's loss making dodgy "investments". The silence from serially lying PM Grossmajib and the MOF as to how this additional $4 billion debt will be repaid, is deafening by its absolute silence!

As at 31st march 2014, 1GDB's balance sheet showed that it had total loans and liabilities of about $51.5 BILLION!! CLICK HERE.

The scenario and computations are so simple, it's incredible that a MoF and 100% government owned company like 1GDB cannot get the math correct!

The possible scenario and computations are as follows:

1. JV buys 60% of BTL shares at balance sheet revaluation cost:

Revalued land cost - 12.35billion
Less: loans (sukuk/relocation liabilities) - 3.55b
Net - 8.8b

Cost of 60% shares to JV = 8.8b x 60% = 5.28b

Therefore 1GDB will, as 100% previous owner of BTL, receive $5.28b, and be reduced to a 40% shareholder of BTL. BTL, as the operating company, will bear the cost of the $3.55 billion loans and settle it from future profits.

2. JV buys 60% of BTL shares and both JV and 1GDB agree to settle loans of $3.55 billion to save interest cost

a. JV pays 1GDB 60% of 8.8b = 5.28b
JV pays BTL 60% of 3.55b loans = 2.13b
JV pays in total = $7.41b

b. 1GDB receives from JV = 5.28b
Less: 1GDB pays BTL 40% of 3.55b loans = 1.42b
Net cash with 1GDB - 3.86b

BTL settles loans of 3.55b. BTL's share capital may be increased by a further 3.55b and issued 60%:40% to JV and 1GDB or BTL's balance sheet may show that the 3.55b is owed to JV and 1GDB 60%:40%.

3. BTL transfers land to SPV for revalued $12.35 billion, sells 60% shares of SPV to JV and 40% to 1GDB

a. JV cost of 60% shares in SPV = 12.35b x 60% = 7.41b
1GDB cost of 40% shares in SPV = 12.35b x 40% = 4.94b
TOTAL SPV Share Capital and land asset = 12.35B

b. BTL receives from JV and 1GDB for shares = 12.35b
BTL pays off loans = 3.55b
Net cash in BTL = 8.8b

Therefore BTL will pay 1GDB 8.8b as final dividend on winding up.

c. 1GDB receives dividend from BTL = 8.8b
Less: 1GDB pays SPV for shares 40% x 12.35b = 4.94b
Net cash with 1GDB = $3.86 billion.

Surely a signed Sale & Purchase Agreement resulting from a comprehensive RFP (Request For Proposal) issued by 1GDB will not contain all 3 options to the buyer i.e. The JV? It's unheard of. What kind of silly game is 1GDB and its clueless executives playing?

Let us also clear up the misleading statement that eventually 76% of BTL will be controlled by local companies. The respective shareholdings in BTL will be:

1. 1GDB - 40%
2. Local companies - 60% x 60% = 36%
3. China company - 40% x 60% = 24%

The real facts are that the China company is the one that will control and carry out all construction and sales work which will generate profits. There is no way a China company will secure a minority stake and come up with billions of dollars of cash upfront, and commit itself to more billions of dollars in construction and selling costs, if it does not have iron-clad contractual clauses that it will control the entire business side of the BTL project. 

It will do this by having control over the board of directors of the JV. When push comes to shove, there is no way the local Chinese tycoon who has partnered the China company will vote against them. Otherwise, he might one day find his goolies nailed to the flag pole of his corporate HQ!!

But do note that serially lying PM Grossmajib has once again bailed out 1GDB by getting state and Federal-owned GLC's and sovereign funds in bailing out 1GDB's debts to the tune of billions of dollars, without accounting for the massive fraud that has taken place at 1GDB and its $51.5 billion liabilities!!

That this deal is not as kosher as PM Grossmajib and 1GDB's Chairman, CEO and Board of Directors make it out to be, is plain from the fact that despite calls from MP's for the Sales & Purchase agreement to be published in the public interest, there has been no response.

How does 1GDB explain that the China company has announced that it will pay 50% of $5.28 billion when it has proposed to purchase only 40% of BTL's share capital? Are the other local companies and state-owned funds coming up with their proportionate share of cash at all?

Or, are there deals within deals and spongeing BUMNO/SCUMNO Ali Baba's lurking in the shadows to rip us off again and again?

And if there is no fraud, why hasn't PM Grossmajib sued the WSJ for its articles revealing that $2.6 billion flowed through his personal bank account? PM Grossmajib has claimed that he did not personally benefit from the $2.6 billion! But really, do sharks fly or Dracula gag from slurping fresh blood?

Donplaypuks® with simple math, O'serially lying and incompetent PM Grossmajib, 1GDB Chairman, Directors and CEO Arul Kaunda Kundi!

8 comments:

houdini said...

It`s a BAILOUT pure & simple.

houdini said...

Even if Arul is telling the truth, the Bandar Malaysia deal is a bail-out of 1 MDB by the Malaysian & Johor State Governments
by Ganesh Sahathevan

[]

What Arul did not do was to elaborate who exactly IWH's shareholders are.As IWH says on its website:

Iskandar Waterfront Holdings (IWH) is a Public-Private Partnership (PPP) involving Credence Resources Sdn Bhd (Private equity) and Kumpulan Prasarana Rakyat Johor Sdn Bhd (KPRJ) (State equity). The Federal Government is also a strategic partner in IWH through its subsidiary – Iskandar Waterfront Sdn Bhd – in which Khazanah Nasional Berhad (KZN) and Employees Provident Fund (EPF) are also shareholders through Iskandar Investment Berhad.

Given the above, the obvious conclusion to this claim republished below by Arul Kanda must be that Government funds have been used ,or will be used to purchase Bandar Malaysia and therefore bail-out 1 MDB:

“We had a plan to conduct a strategic review, to conduct a rationalisation plan.
“Alhamdulillah, we’ve achieved what we said we would achieve by way of executing legally binding agreements for the debt swap, the Edra sale and also Bandar Malaysia,” he said.

As for the other parties, the Chinese as reported cannot even agree with IWH on price, and Credence Resource's Lim Kian Hoo is already talking about deferred payment.

http://sahathevan.blogspot.my/2016/01/even-if-arul-is-telling-truth-bandar.html

houdini said...
This comment has been removed by the author.
houdini said...

Bandar Malaysia price was always to be determined on a gross, not net basis:Arul Kanda contradicted by transaction advisor CH WTW
by Ganesh Sahathevan


Presented here as reported in The Star, 27 June 2015:

“We are looking at equity participation. The asset of this company is the land,” says managing director Foo Gee Jen.

He said whoever comes in will have to calculate or make an assumption of the land value, make a bid on the land value on a gross basis, determine what sort of equity partnership and other criteria."

"They will have to determine their own equity (with respect to their consortium partners), payment terms – cash up front, deferred payment terms – and their respective investments, he (said)."

CH Williams is the transaction advisor for 1MDB RE Sdn Bhd which is the master developer of 486 acres located on the fringe of the city.

http://sahathevan.blogspot.my/2016/01/bandar-malaysia-price-was-always-to-be.html

Donplaypuks® said...

Houdini

Thanks for the clarification.

But, if the sale was on a gross basis, then CREC would have announced that their JV would have to pay 60% x $12.35 billion = $7.41 billion, of which their share would be 40% = $2.96 billion.

However, they announced figures of $5.28b and $2.64b. The figures do not compute.

Again, if it was gross, then 1MDB would receive $7.41 b and then pay the sukuk and relocation debts of $3.55, leaving only $3.86b to settle other 1MDB debts of $42 billion.

But 1MDB announced as though they would receive net $7.41b which does not figure with what CREC announced to the Hong Kong Stock Exchange!!??

Something looks very fishy that the parties are talking aboout totally different numbers!

Alicia N said...

he is so used to telling lies he forgot how to say true words,,,

Anonymous said...

Bro, the 3.55b figure comes from where?

Donplaypuks® said...

Anon 9.09 a.m.

The $3.55 billion is the cost of sukuk loan/bond and airforce relocation cost creditors (1.6b +1.95b) as given by 1GDB, Refer http://www.thesundaily.my/news/1658042.

The question then is if the S&P says JV is buying 60% of land valued at $12.35b and transferred to a SPV and then BTL pays off the $3.55b creditors. 60% of $12.35b = $7.41b

OR JV is buying 60% of the shares of the revalued BTL at net $8.8b in which case the $3.55b debt remains in BT's balance sheet, to be paid off from future profits or capital injections from ALL shareholders.

It can't be that both options are stated in a S&P.

The China announcement to the HK Stock Exchange indicates that the 2nd option is in the S&P, not the SPV option. The JV will only pay 60% of $8.8 billion = $5.28b

This confusion has not been explained by 1GDB!!