1MDB misses bond payment to IPIC, says yet to receive rationalisation proceeds

PETALING JAYA: 1Malaysia Development Bhd (1MDB), which failed to make a US$602.73 million (RM2.6 billion) bond payment to Abu Dhabi’s International Petroleum Investment Co (IPIC) by the July 31 deadline, has pledged to do so this month upon receipt of payment from its rationalisation plan.

The state-owned investment fund explained that the payment is delayed because it is yet to receive proceeds from its rationalisation plan, which were due last month.

“Due to the need for additional regulatory approvals, the receipt of those funds has been delayed to August 2017,” it said in a media statement yesterday. No other details were given.

1MDB reiterated that all payments due from 1MDB to IPIC will be made from the proceeds of the 1MDB rationalisation plan.

“As these are the funds which will be used to pay IPIC, 1MDB has written to IPIC to inform them of our commitment to meet the obligations, originally due on July 31, 2017, in August 2017,” it added.

Meanwhile, IPIC said in a filing with the London Stock Exchange that it has not received the bond payment and US$26.02 million that were due under the consent award and settlement with Minister of Finance (Incorporated) Malaysia (MoF Inc) and 1MDB.

“Under the settlement, there is a five-business day cure period for MOF Inc and 1MDB to remedy their non-payment before MOF Inc and 1MDB become subject to additional obligations to IPIC and Aabar Investments PJS,” it noted.

IPIC made no mention of 1MDB’s request for more time.

1MDB was supposed to make a RM2.6 billion bond payment to IPIC by July 31, while another tranche of RM2.6 billion is due by the end of this year.

1MDB’s rationalisation plan involves, among others, a “debt for asset swap” with IPIC, the sale of Edra Global Energy Bhd to China General Nuclear Power Corp for RM9.83 billion, master-planned land development in Tun Razak Exchange and disposal of non-core assets.

The Bandar Malaysia deal with Iskandar Waterfront Holdings Sdn Bhd and China Railway Engineering Corp (M) Sdn Bhd was aborted recently.