1MDB's sale of power assets to CGN will only trim debt

MALAYSIA'S troubled 1Malaysia Development Berhad's (1MDB) sale of all its power assets to China General Nuclear Power Corp (CGN) for RM9.83 billion (S$3.26 billion) in cash no doubt marks a significant foreign direct investment (FDI) commitment for the scandal-whipped country.

But apart from helping to cut the firm's crippling debt and allowing the state-controlled entity more room to focus on its property assets to rationalise its operations, it does little else. As it stands, the deal does not create new jobs; has little impact on sustaining long-term economic growth; has not spawned new, strategic industries for the country; and neither will it likely open the floodgates to more FDI (that is, not until the controversy that has rattled the country is completely addressed) - all of which were the original intent of 1MDB.

And no matter how one slices and dices the sale which provides much needed breathing space for the debt-ridden firm, the fact is that 1MDB - which has repeatedly claimed that it acquired the energy assets for long-term value, not just for the company but also the country - has not achieved that goal.