1MDB gets 1-month extension to pay up

Men walk past an 1MDB billboard at the fund's flagship Tun Razak Exchange development in Kuala Lumpur, on March 1, 2015.
Men walk past an 1MDB billboard at the fund's flagship Tun Razak Exchange development in Kuala Lumpur, on March 1, 2015. PHOTO: REUTERS

PUTRAJAYA •Troubled state investor 1Malaysia Development Berhad (1MDB) has been given a month's extension to pay US$603 million (S$820.7 million) owed to Abu Dhabi's sovereign wealth fund, after missing a July 31 deadline.

The International Petroleum Investment Company (Ipic) said in a filing to the London bourse that the new Aug 31 payment deadline will nonetheless incur "default interest on the delayed payment".

"This extension is subject to MOF Inc and 1MDB making payment of not less than US$310,000,000 of the full amount due on or before Aug 12, 2017," it said, referring to the Malaysian Finance Ministry's holding company, which owns 1MDB.

1MDB chairman Irwan Serigar Abdullah also told reporters yesterday that Ipic agreed to a request for an extension after 1MDB said it had yet to receive money from the sale of investment fund units.

"There are some regulatory requirements we need to comply with, which will take some time that we didn't foresee," said the Finance Ministry secretary-general.

Ipic had warned of "additional obligations" after the July 31 deadline if the funds - the first of two payments to settle US$1.2 billion owed - were not received within a "five-business-day cure period".

1MDB had said the need for added regulatory approvals meant that the money would be received only this month.

The payment was due as part of an April settlement between 1MDB and Ipic, after Ipic launched arbitration proceedings last year claiming US$6.5 billion from 1MDB.

The failure of 1MDB to redeem its investment fund units in time has led critics to question if the units have any value. Opposition lawmaker Tony Pua has alleged that the units are fraudulent, based on the United States Department of Justice filings in 2016 and 2017 seeking to seize US$1.7 billion out of an alleged US$4.5 billion siphoned from 1MDB.

Shannon Teoh

A version of this article appeared in the print edition of The Straits Times on August 09, 2017, with the headline '1MDB gets 1-month extension to pay up'. Print Edition | Subscribe