TRX welcomes MoF bailout

(Video courtesy of TRX City Sdn Bhd)

PETALING JAYA (June 21): TRX City Sdn Bhd has welcomed the Ministry of Finance’s RM2.8 billion bailout of the financially-strapped 70-acre Tun Razak Exchange (TRX) in Kuala Lumpur.

“We thank the Government of Malaysia for having confidence in TRX, KL’s new international financial district. Our investors will view this commitment positively as it confirms the government’s pro-business stance,” said its CEO Datuk Azmar Talib in a statement today.

“We have made significant progress with the project and attracted world-class investors. With this much needed support, and the ongoing commitment from our partners, we look forward to delivering the project within schedule and on budget, for the benefit of Malaysia and all Malaysians,” he added.

He also said a police report will be lodged over the funds – totalling RM3.07 billion, according to the Ministry of Finance (MoF) – meant for the TRX development that was taken by 1Malaysia Development Bhd when TRX City was its subsidiary.

TRX City was transferred to the MoF on March 31.

In the statement, the master developer of the financial district said: “As Kuala Lumpur’s future central business district (CBD), TRX will strengthen the city’s position as a leading centre for international finance and business, by creating an integrated and seamless business environment for financial services firms, multinational companies (MNCs) and ancillary businesses.”

Finance Minister Lim Guan Eng had earlier today announced the RM2.8 billion injection of capital into the development to avoid bigger losses.

The sum will be used to complete all necessary infrastructure works in the project.

Lim said the government would have to pay RM3.51 billion in compensation for not completing the project and lose the RM3.7 billion that was transferred earlier to TRX City the development was abandoned.

This brings total government funding of the project to RM6.5 billion, he said.

“Completing TRX will allow the full value of the project to be realised. This will help recoup and repay the TRX City borrowings, including the sums misappropriated by 1MDB, recover all funding investments and opportunity costs, as well as potentially achieve a small surplus return,” added Lim.