1Malaysia Development Bhd (1MDB) has given an assurance that all its investments have been prudently and professionally managed.

"Some of the loans are long­term in nature, but we believe this financial commitment can be met. We are also in the process of adding and unlocking value to the assets that we acquire," 1MDB chairperson Lodin Wok Kamaruddin told reporters yesterday.

Dispelling misperceptions over 1MDB's ability to repay loans, Lodin said 1MDB was looking at restructuring its loans to address the mismatching long­term investment projects and short­term loans.

He said its ventures in the Tun Razak Exchange (TRX), the Bandar Malaysia Project and in the energy sector were all long­term in nature with long gestation periods.

In its latest audited results, the group registered a loss of RM665.3 million for its financial year (FY) ending March 31, 2014, mainly due to higher finance costs of RM2.4 billion, compared with RM1.6 billion the previous financial year, as part of its strategy to grow the asset base.

"1MDB consolidated Jimah Energy's assets for FY2014 and expanded its real estate operations, resulting in increased operating expenses and financing cost," said Lodin ( right ).

The value of the group's asset base increased to RM51.4 billion, compared with RM44.6 billion in FY2013, with borrowings rising from RM36.2 billion to RM41.9 billion.

Its total revenue increased by 50 percent from RM2.6 billion to RM4.3 billion this year, reflecting the quality of the portfolio of assets being built and the strength of revenue generation.

Lodin stressed that the investments parked in Cayman Island were legal, through 1MDB subsidiary, Brazen Sky Ltd, for tax reasons and US dollar debt settlement.

"Cayman Islands is considered a tax haven for a lot of companies. We had been informed that it is appropriate for us to have a company registered in Cayman Island and for us to have the fund placed with this company.

"This is just a temporary process, because you must remember this fund was initially invested in a joint venture with another party," he said.

He said as at March 31, 2014, 1MDB's assets and liabilities stood at RM51.4 billion and RM48.9 billion respectively.

To date, 60 percent or about RM4 billion of the fund has been liquidated to settle 1MDB's various financial commitments, and the company is on track to liquidate the remaining 40 percent before year-end, Lodin added.

­- Bernama

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