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Thursday, May 14, 2015

NO PLACE FOR NAJIB TO HIDE: Deutsche Bank wants 1MDB to pay up S$ 975 million - report

NO PLACE FOR NAJIB TO HIDE: Deutsche Bank wants 1MDB to pay up S$ 975 million - report
PETALING JAYA - Deutsche Bank Singapore is leading a consortium of lenders that plan to ask troubled 1 Malaysia Development Bhd (1MDB) to pay up a US$975 million syndicated loan before the loan falls due in less than four months, Singapore's Business Times reported yesterday.
The move is feared for its potential to trigger cascading defaults on the remainder of 1MDB's reported RM42 billion in debt if they declare the firm to be delinquent.
The consortium's fears are said to be prompted by "incomplete" documents that 1MDB provided as a form of security, rendering the terms of the loan unmet. This alleged breach allows the banks to rescind the loan ahead of the August due date.
The loan was secured via the US$1.103 billion that 1MDB said was being held by its Brazen Sky unit in BSI Singapore, originally from a tranche of offshore deposits it previously kept in the Cayman Islands.
"What was earlier construed as a tightly collateralised loan is now making the banks nervous, given this controversy," an unnamed source told the Singapore business daily.
It reported that the banks and 1MDB are currently in "intense negotiations" to prevent a recall of the loan that was taken to pay Abu Dhabi's International Petroleum Investment Company (IPIC) to terminate an option to subscribe for the future listing of 1MDB's power asset, Edra Energy.
1MDB declined to comment on the matter when contacted by the Singapore business paper, as did Deutsche Bank Singapore.
BSI Singapore is said to have engaged lawyers in anticipation of possible claims against the bank in the event the 1MDB crisis worsens while one officer who handled 1MDB's account has been put on "gardening leave", sources told the Singaporean business daily.
"If things start to develop and no one is sure what the affected parties might do, the banks need to ensure legal representation is in place to defend their position. It's a normal prudent move on their part," it quoted a source as saying. - Sundaily

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