1Malaysia Development Bhd (1MDB) and its guarantor Minister of Finance Inc have been given until the end of the month to pay the US$602.73 million (RM2.56 billion) debt originally due on 31 July, reported The Star and Bloomberg.
But the new deadline depends on the fulfilment of a certain condition by the debtor, revealed the creditor, International Petroleum Investment Company (IPIC).
“This extension is subject to MoF Inc and 1MDB making payment of not less than US$310 million (RM1.33 billion) of the full amount due on or before 12 August 2017,” it said in a filing with the London Stock Exchange.
Originally, Reuters reported on 1 August that 1MDB has been granted another five days to pay the amount to the Abu Dhabi state fund after it missed making the payment in end-July.
Back then, the Malaysian sovereign fund pledged to pay this month, but it didn’t specify a date. 1MDB said it failed to fulfil its financial obligation as it needs to get more “regulatory approvals”, and it will use the proceeds from its rationalisation program to pay the debt.
Yesterday (8 August), Malaysian Treasury Secretary General Irwan Serigar Abdullah, who also heads 1MDB’s board, said 1MDB miscalculated the time it would take to complete the sale of its subsidiaries and meet regulatory approvals.
In April 2017, after seeking the intervention of the London Court of International Arbitration, 1MDB agreed to pay an interest-accruing US$1.2 billion in two instalments in July and December this year to IPIC and its Aabar Investments unit to resolve a debt dispute.
MoF Inc 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. The government initially 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 deal was scrapped in May.
Image sourced from The Star
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