1MDB boss denies IPIC bailout, mum on details

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Embattled sovereign fund 1Malaysia Development Berhad (1MDB) has denied the US$ 1 billion from an Abu Dhabi company to help its debt repayments is a bailout.

 

“Further to the Ministry of Finance's statement on 29 May, we have noted with concern claims from certain quarters suggesting that the USD1 billion (RM3.57 billion) payment from the International Petroleum Investment Company (IPIC) of Abu Dhabi is a loan, or involves 1MDB assuming further debt.

 

“That is absolutely not the case.

 

“This is a business transaction; not a loan, not any kind of debt and not a bail out,” said 1MDB president and group executive director Arul Kanda in a statement today.

 

He explained the amount was an “initial payment as part of a broader agreement to comprehensively address the various financial asset and liability transactions between IPIC, Aabar and 1MDB, further details of which will be announced in due course".

However he did not divulge any further details, except to repeat Second Finance Minister Ahmad Husni Hanadzlah’s statement that it is to “comprehensively address the various financial asset and liability transactions between IPIC, Aabar and 1MDB, further details of which will be announced in due course".

 

The brief statement comes amidst growing calls for 1MDB to be probed independently over its mammoth debt situation and demands for its board of directors to be sacked .

 

The IPIC deal was first announced by Ahmad Husni, who submitted a proposal to cabinet on Friday on the restructuring plan for 1MDB.

 

As part of the agreement, IPIC will make a payment of US$1 billion, on or before June 4, 2015 to be used to repay a US$975 million loan, in advance of its due date, to a syndicate of international bank lenders, Ahmad Husni was reported saying.



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