Debt woes of M'sia's 1MDB spook investors

Asia News Network | .

1Malaysia Development Berhad's (1MDB) long-delayed plan for a 12 billion ringgit (US$3.36 billion) IPO is facing renewed headwinds after investors were spooked by the repeated failure of prime minister Najib Razak's strategic investment agency to pay off a 2 billion loan - just part of a debt burden now at 42 billion ringgit.

The initial public offering of its energy assets could help cut the borrowings, but reported delays in renegotiating debt and due diligence - 1MDB has had three auditors since it was set up in 2009 - have compounded a staggering 665 million ringgit loss for its financial year ending March 2014.

These problems are driving away would-be investors, with some asset management firms telling The Straits Times they do not intend to touch the IPO.

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