Malaysia’s 1MDB denies Abu Dhabi’s IPIC pulling out of debt plan

IPIC website

Malaysian state fund 1Malaysia Development Bhd (1MDB) said Wednesday denied a report which said Abu Dhabi’s International Petroleum Investment Co’s (IPIC) was pulling out from a plan to help restructure its (1MDB’s) debts.

“We in fact confirm that 1MDB remains engaged in discussions with IPIC, to conclude the transaction per the terms as officially announced by IPIC to the London Stock Exchange on 10 June 2015,” the troubled fund said in a statement.

Singapore Business Times quoting sources had said that IPIC involvement in IMBD’s debt restructuring had been called off.

“1MDB strongly denies this unproven allegation. We in fact confirm that 1MDB remains engaged in discussions with IPIC, to conclude the transaction per the terms as officially announced by IPIC to the London Stock Exchange on June 10, 2015,” the troubled fund said in a statement today.

It further added that it is disappointed that “a hitherto respectable and licensed publication such as the Singapore Business Times appears to carry a story based solely on unproven remarks by an unnamed individual. Such speculative reporting, which has no grounding in the facts, is clearly unprofessional and unnecessary”.

1MDB said it is focused on the successful implementation of its rationalisation plan, which the Finance Ministry presented to the Malaysian Cabinet on May 29, 2015.

The firm reiterates that it has since made various official announcements on the binding term sheet executed with IPIC, the shortlisting of selected bidders for monetisation of its power unit Edra Global Energy Bhd, and the ongoing sale process for Bandar Malaysia, which was last reported to have attracted 40 investors, local and foreign.

Related stories:

1MDB shortlists investors for Edra, confident of an agreement by Q4

1MDB’s Bandar Malaysia attracts interest from 40 investors

“We reaffirm our commitment to the success of the rationalisation plan and will continue to issue official progress updates on a regular basis,” 1MDB said.

This morning, Singapore Business Times reported that 1MDB, which has been unrelentingly dogged by political controversies, may hit yet another setback in its financial recuperation as IPIC implied it could pull the plug on a plan to help restructure the former’s $3.5 billion debt.

IPIC had agreed to the debt restructuring barely three months ago.

The newspaper reported that IPIC and its subsidiary Aabar Investments, which have had significant dealings with 1MDB, are having second thoughts over the agreement. The debt restructuring would cut 1MDB’s debts by MYR16 billion in exchange for undisclosed assets.

“The deal is as good as off,” Business Time reported, citing a reliable source.

The newspaper noted that IPIC’s backing out of the debt restructuring agreement would be a major blow for 1MDB whose troubles have triggered a global-scale probe from Malaysian authorities, Singapore and Swiss authorities.

The agreement, signed by 1MDB and its sole owner, Malaysia’s Finance Ministry, with IPIC and Aabar in late May, is a crucial part of the firm’s rationalisation plan to tackle its hefty debt totalling $11 billion.

IPIC also provided $1 billion to 1MDB to repay a syndicated loan before it was due after foreign banks turned jittery. The loan of $975 million provided by a consortium of banks led by Deutsche Bank was to due on August 31.

This was part of a broader plan whereby IPIC and Aabar agreed to cover the interest payments on $3.5 billion 1MDB bonds on an interim basis, forgive any debt owed to it (by 1MDB) and eventually, take over the debt papers once the troubled firm transfers the corresponding worth of assets issued in 2012 by 1MDB to fund the purchase of power assets, are guaranteed by IPIC.

Also read: 1MDB welcomes TNB’s non-binding offer for power assets

Tenaga Nasional to take 1MDB’s 70% stake in Project 3B

MY Property Dealbook: Tadmax disposes land to 1MDB, UEM sells Imperia to Khazanah

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.