1MDB enters agreement with IPIC

PETALING JAYA: 1Malaysia Development Bhd (1MDB) has entered into a binding agreement with the International Petroleum Investment Company (IPIC) and its subsidiary Aabar Investments, said Minister of Finance II Datuk Seri Ahmad Husni Hanadzlah (pix).
"As part of this agreement, IPIC will make a payment of US$1 billion, on or before June 4, 2015. This US$1 billion payment will be used to repay a US$975 million (RM3.5 billion) loan, in advance of its due date, to a syndicate of international bank lenders," he said in a statement today.
He said the agreement will also include further measures to comprehensively address the various financial asset and liability transactions between the parties, further details of which will be announced in due course.
"This agreement marks a significant step towards reducing 1MDB's overall debt levels and is a crucial part of the rationalisation plan I presented to Cabinet earlier, which we expect to be implemented in full by early next year," he added.
Husni said he had presented a rationalisation plan for 1MDB to the Cabinet earlier this morning, following 1MDB's announcement in February 2015 on the conclusion of a strategic review.
"As has already been achieved with Edra Energy (Edra Global Energy Bhd, 1MDB's power assets), this will see TRX and Bandar Malaysia established as standalone companies, with full autonomy and accountability for their operational and financial performance," he said, adding that options to monetise Edra Energy are being pursued.
He also said that the Finance Ministry will remain a key shareholder in TRX and Bandar Malaysia, which will raise equity via third party investors.
Proceeds raised will be used for capital expenditure and to reduce 1MDB's debt.