Malaysia Drains Crowdsourced ‘Hope Fund’ to Repay 1MDB Debt
Malaysia’s Hope Fund has been exhausted as the government used all 205 million ringgit ($49 million) it raised from the public to pay off some of 1MDB’s debt, Finance Minister Lim Guan Eng said.
The Finance Ministry set up Tabung Harapan, or the Hope Fund, following a shock election victory in May 2018 by a coalition led by Prime Minister Mahathir Mohamad. The fund drew contributions from Malaysians as well as businesses eager to help after the government said the country’s debt was higher than previously disclosed by the previous administration.
The fund collected 202.7 million ringgit in donations and 2.8 million ringgit in interest as of January, Lim said in a statement on Saturday. Debt at the troubled state fund 1Malaysia Development Bhd., or 1MDB, is currently about 50.5 billion ringgit, he said.
About 144 million ringgit from the fund went to paying the interest on 1MDB’s Islamic Medium Term Note sukuk in May. The government used the remaining 61.7 million ringgit from the Hope Fund on Thursday to offset another interest payment on the same bond. The remainder 82.07 million ringgit for the November coupon was paid using funds from the recovery of 1MDB assets, which has amounted to about 1.45 billion ringgit, Lim said.
“The government is committed to pay all the loan obligations that were inherited by the previous administration,” Lim said, adding that it has or will cost 13.9 billion ringgit to pay the debts of 1MDB and SRC International Sdn. through 2020. The next 1MDB payment will be in March for interest of 66 million ringgit on another bond.
©2019 Bloomberg L.P.