US$1 billion payment from IPIC is not a loan or bail out, says 1MDB
1MDB said the US$1 billion payment from IPIC is is a business transaction, not a loan or bail out.
1Malaysia Development Bhd (1MDB) has clarified that the US$1 billion payment from the International Petroleum Investment Company (IPIC) of Abu Dhabi announced last Friday is a business transaction and not a loan, a debt or a bail out.
"Further to the Ministry of Finance's statement on May 29, we have noted with concern claims from certain quarters suggesting that the US$1 billion payment from IPIC is a loan, or involves 1MDB assuming further debt.
"That is absolutely not the case. This is a business transaction; not a loan, not any kind of debt and not a bail out.
"It is an initial payment as part of a broader agreement to comprehensively address the various financial asset and liability transactions between IPIC, Aabar and 1MDB, further details of which will be announced in due course," 1MDB President/Group Executive Director Arul Kanda in a statement today.
On May 29, Finance Ministry in a statement stated that 1MDB has entered into a binding agreement with the IPIC and its unit, Aabar Investments (Aabar), involving a payment of US$1 billion.
READ: IPIC to inject USD1 billion to repay 1MDB's debt
It also noted that 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.