The board of 1Malaysia Development Bhd (1MDB) is handling the payment of US$603 million (approx. RM2.58 billion) owed to an Abu Dhabi state fund, reported Bernama.
“Let them resolve this issue, this is a company matter. If they say they will be able to pay, let’s wait for them to pay,” said Second Finance Minister Datuk Seri Johari Abdul Ghani.
Asked whether the Ministry of Finance will provide public funds if 1MDB sought their help, he said the sovereign wealth fund has not yet asked for the government’s assistance.
“You do not assist people when they do not come to see you. This should not be an issue at this moment because it is being handled at the board level,” added Johari.
On Tuesday (1 August), Reuters reported that 1MDB has been granted another five days to pay the amount owed to International Petroleum Investment Company (IPIC) after it failed to fulfill its financial obligation originally due on 31 July (Monday).
In a statement, the Malaysian sovereign fund promised to meet its financial obligation to IPIC this month, but it didn’t specify a date.
1MDB said it missed making the payment as it needs to get more “regulatory approvals” and it will use the proceeds from its rationalisation plan to pay the amount owed to the Abu Dhabi state fund.
But IPIC’s owner Mubadala Development Company said on Tuesday that Malaysia’s Ministry of Finance and 1MDB only have five days to fulfill their financial obligation.
“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.”
In April 2017, after seeking the intervention of the London Court of International Arbitration, 1MDB agreed to pay US$1.2 billion in two installments in July and December this year to IPIC and its Aabar Investments unit to resolve a debt dispute.
Malaysia’s Finance Ministry also committed to assume responsibility for all future interest and principal payments for two bonds worth a total of US$3.5 billion.
Last year, the Malaysian government dissolved 1MDB’s advisory board and transferred some of its assets, while others were disposed under a rationalisation programme.
Among them is the land for the Bandar Malaysia project, which will house the High-Speed Rail connecting Singapore with Kuala Lumpur. Initially, the government agreed to sell a 60 percent stake in the property to a consortium consisting of Iskandar Waterfront Holdings (IWH) and China Railway Engineering Corp (CREC) for US$1.72 billion, but the transaction was scrapped in May.
Image sourced from The Star
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