KINIBIZ Putrajaya has committed to making good 1MDB’s commitment in its recent transaction with International Petroleum Investment Company (IPIC), which saw the latter provide billions in early June to repay some debt.
A filing to the London Stock Exchange (LSE) stated that both 1MDB and its sole shareholder Ministry of Finance (MOF) have agreed to “perform the obligations contemplated in the binding term sheet and to indemnify IPIC and Aabar for any non-performance, and vice versa”.
Dated June 10, 2015, the filing disclosed terms of a binding term sheet signed by IPIC, its subsidiary Aabar Investments PJS, the Minister of Finance Incorporated, Malaysia (MOF Inc) and 1MDB on May 28, 2015.
Following the agreement, IPIC extended US$1 billion to 1MDB on June 4 to repay a US$975 million (RM3.57 billion) loan from an international banking consortium that was demanding payment four months ahead of a September 2015 repayment date.
Other terms of the binding term sheet stipulate that from June 4 onwards, IPIC will assume all interest payments due under two 1MDB loans amounting to US$3.5 billion, which were guaranteed by IPIC.
IPIC is also to receive a transfer of assets equivalent to US$1 billion in value by June 30, 2016, after which IPIC will directly take liability for all payment obligations under the two 1MDB loans as well as forgive certain financial obligations of 1MDB to IPIC.
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