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1MDB said to be in early settlement talks for US$975m loan
[KUALA LUMPUR] 1Malaysia Development Bhd may make an early repayment of a US$975 million syndicated loan led by Deutsche Bank AG that the state investment company took out in September, according to people familiar with the matter.
The loan is due at the end of August and 1MDB hasn't come up with additional collateral sought by the lenders, prompting talks for early settlement, said one of the people, who asked not to be identified because the details are private. Singapore's Business Times said Wednesday that lenders plan to ask 1MDB to repay the loan early.
1MDB, whose borrowings had reached 41.9 billion ringgit (US$11.6 billion) through March 2014, flirted with default earlier this year after delaying payment on a 2 billion ringgit loan. It said Wednesday it cannot comment immediately on reports of a planned early settlement of the loan.
"We are aware of recent press reports and statements concerning a loan taken by 1MDB in September 2014," President and Group Executive Director Arul Kanda said in an e-mail to Bloomberg News Wednesday. "Whilst we would like to respond in detail, this relates to a confidential banking matter, which prevents us from commenting at the present time. However, we intend to update the market as soon as we are in a position to do so."
Sarah Stabler, a Deutsche Bank spokeswoman in Singapore, declined to comment.
1MDB, whose advisory board is headed by Prime Minister Najib Razak, announced plans in February to dismantle its assets. The Kuala Lumpur-based firm, set up by the government five years ago to build infrastructure, has drawn criticism from lawmakers for its rising borrowings.