Monday, October 12, 2009

Malaysia, Saudi Arabia to set up RM9b venture

Malaysia and Saudi Arabia are chartering a new era of economic cooperation with the setting up of a US$2.5 billion (RM8.73 billion) jointventure (JV) that will spearhead the flow of foreign direct investments (FDIs) from the Middle East.
The operations of the JV company will be undertaken by PetroSaudi International Ltd (PSI) and 1Malaysia Development Bhd (1MDB). The companies said in a joint statement issued yesterday that the JV will make strategic investments in highimpact projects in Malaysia. According to Prime Minister Datuk Seri Mohd Najib Razak in a Bernama report, Malaysia will put up US$1 billion of the fund for the joint venture, with Saudi Arabia providing the balance.
He said the government had sourced the money from a recent bond issuance.
"The money is already in place. It was confirmed by the central bank governor (Tan Sri Dr Zeti Akhtar Aziz) yesterday (Sept 29)," Mohd Najib, generate RM1 billion worth of spillover projects involving two hotels, a shopping mall and an office building from the development of LegoLand Malaysia. This mixed development will be built on 18ha of land surrounding the theme park.
"We are talking to potential partners and hope to announce three more partners by the end of this year," she said. LegoLand Malaysia, the first LegoLand theme park in Asia, which is to be built on a 22ha site, is expected to be completed by April 2012.

(This story appeared in The Malaysian Reserve on Oct 1, 2009. The Malaysian Reserve is a daily business/finance newspaper published out of Kuala Lumpur, with a sectoral page on Islamic finance on Mondays, edited by Habhajan Singh)