1MDB-IPIC Debt Settlement Arrangements
1MDB refers to a statement issued by International Petroleum Investment Company (IPIC) on 8 October 2015 confirming that progress continues to be made with respect to a binding term-sheet signed between the two companies.
The transaction will see IPIC assume obligation for a USD3.5 billion bond principal and interest, currently held by 1MDB, and follows a USD1 billion cash payment made by IPIC to 1MDB in June 2015. IPIC’s assumption of these obligations will be satisfied through an exchange of assets, provided by 1MDB, partly the company’s USD denominated cash deposits and partly its USD funds under management – either in cash or in fund units – upon mutual agreement with IPIC.
The transaction will, upon completion, result in a reduction of up to approximately RM16 billion from 1MDB's debt levels. This demonstrates the success of 1MDB’s rationalisation plan, which is also reflected by the strong domestic and international investor interest in Edra Energy and Bandar Malaysia, symbolizing the value 1MDB has built up in these assets over time.
IPIC’s statement, confirming its commitment to working with 1MDB and its 100% shareholder Ministry of Finance, conclusively puts to rest false claims and allegations concerning the relationship between the two companies that had previously been published by the Business Times and subsequently repeated, without proof, by YB Tony Pua. 1MDB trusts that with this conclusive evidence, all third parties with no involvement in the ongoing 1MDB rationalisation plan will now cease making unfounded allegations with respect to its implementation.