1Malaysia Development Berhad (1MDB) may have repaid over RM2 billion of its debt since the beginning of this year but its debt will likely continue to grow because it is largely in US dollars.

In view of the weakening Ringgit against the greenback, Petaling Jaya Utara MP Tony Pua estimated that the 1MDB's debt should be closer to RM50 billion.

In a press release today, Pua also pointed out that 1MDB is also taking on additional loans.

According to its financial report as of March 31, 2014, 1MDB had a total debt of RM42 billion in debt with RM22.25 billion of that amount denominated in US dollar.

The ringgit was valued at RM3.26 per US dollar at that time but as of today stands at RM3.69 to a US dollar.

With the ballooning debt, Pua said the government's push to have 1MDB list its energy arm is unlikely to raise enough funds to rescue the company.

Pua said 1MDB's energy assets is worth RM10.9 billion and even if its energy arm is valued at a generous RM12 billion in an initial public offering, it can only raise RM9.6 billion if it sells 80 percent of its stake.

'Cut your losses now'

Furthermore, he said even if 1MDB were to sell its property assets, they are only valued at RM7.08 billion as of March 31 last year and even a generous premium of 20 percent will only bring the amount to RM8.5 billion.

"Even in the event where 1MDB is able to successfully list its energy subsidiary and sell its landbank at premium prices, the financially stricken company can only raise barely RM18 billion to repay its RM42 billion debt recorded as at 31 March 2014," said Pua.

As such, Pua said the government should cut its losses and not extend the RM950 million " standby credit " for 1MDB it confirmed yesterday.

"The federal government should not extend bailout funds to 1MDB because it would be a case of throwing good money after bad," he said.

Pua added that Prime Minister Najib Abdul Razak, who is also Finance Minister, should make good on his promise that Putrajaya will only be responsible for RM5.8 billion of 1MDB's loans which it had guarantee and no more, even if 1MDB goes bankrupt.

"That way, the cost to tax-payers as a result of the sheer incompetence, mismanagement and embezzlement in the 1MDB misadventure can be limited to just RM5.8 billion," he said.