KUALA LUMPUR: 1Malaysia Development Bhd (1MDB) has entered into a binding agreement with the International Petroleum Investment Company (IPIC) and its unit, Aabar Investments (Aabar), involving a payment of US$1 billion which will be used to repay loans.
Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said as part of the agreement, IPIC would pay US$1 billion, on or before June 4, 2015, which would be used to repay a US$975 million (RM3.5 billion) loan, in advance of its
due date, to a syndicate of international bank lenders.
The agreement will also include further measures to comprehensively address the various financial asset and liability transactions between the parties, further details of which would be announced in due course, he said in a
statement today.
“This agreement marks a significant step towards reducing 1MDB’s overall debt levels, and is a crucial part of the rationalisation plan I presented to Cabinet earlier, which we expect to be implemented in full by early next year,”
he said.
Ahmad Husni, this morning, presented a plan for the rationalisation of the strategic development company to the Cabinet.
This followed an announcement by 1MDB, in February 2015, of the conclusion of a strategic review.
“As has already been achieved with Edra Energy, this will see TRX and Bandar Malaysia established as standalone companies, with full autonomy and accountability for their operational and financial performance.
“While options are being pursued with respect to the monetisation of Edra Energy, the Ministry of Finance will remain a key shareholder in TRX and Bandar Malaysia, which will raise equity via third party investors.
“Proceeds raised will be used for capital expenditure and to reduce 1MDB’s debt,” Ahmad Husni added.-Bernama