IMDB''s Debt To Be Reduced By A Further RM16 Billion

KUALA LUMPUR, May 30 (Bernama) -- The deal with International Petroleum Investment Company (IPIC) and its unit, Aabar Investments (Aabar), will see 1Malaysia Development Bhd (1MDB)'s debt reduce by approximately RM3.5 billion in less than a week from now. And, it is understood that additional transactions - the details of which will be finalised in the coming weeks - will further reduce 1MDB’s debt by between RM12.0 billion and RM12.5 billion. Second Finance Minister Ahmad Husni Hanadzlah announced on Friday that 1MDB has entered into a binding agreement with the IPIC and Aabar involving a payment of US$1 billion. IPIC would pay US$1 billion, on or before June 4, 2015, which would be used by 1MDB to repay a US$975 million (RM3.5 billion) loan, in advance of its due date, to a syndicate of international bank lenders. He had earlier on Friday, presented a plan for the corporate rationalisation of 1MDB to the Cabinet involving the winding up of 1MDB and setting up of three standalone operating companies. IMDB is expected to be wound down, the Cabinet was told, but the key challenge is its high-level of debt which stood at RM42 billion in its last financial accounts. However, the deal reached with Abu Dhabi-based IPIC and Aabar will help reduce the debt by RM16 billion and in exchange, 1MDB will provide IPIC and Aabar with a number of financial assets, including units that are held in the company’s BSI Singapore account. Contrary to the opposition’s claims that there is nothing there, this proves that the account has value. Discussions are also underway with a number of other parties as well and the Ministry of Finance is confident of resolving all of the debt, and complete the winding down of the company, by early next year. -- BERNAMA