SINGAPORE (Dec 28): 1Malaysia Development Berhad (1MDB) had China state-owned companies to thank when it came to the final settlement of a loan to Abu Dhabi's sovereign wealth fund, according to media reports.
The payment, amounting to some US$600 million ($803 million), made last Friday was the second tranche for a US$1.2 billion emergency loan and other financial support International Petroleum Investment Company (IPIC) extended to 1MDB in July 2015 after the latter was unable to service its debt obligations.
According to The Straits Times, the second instalment was paid with funds raised from the sale of investments in financial instruments held by 1MDB and stakes held in two related entities that own tracts of land in the state of Penang and another 128ha land parcel around Port Klang.
Malaysian government officials declined to identify the buyers in the property transactions, but ST reported one financial executive close to the situation said that the equity interests in the 1MDB property entities were acquired by "concerns ultimately controlled by Chinese state-owned enterprises".
In a filing to the London Stock Exchange on Wednesday, 1MDB said, “IPIC has now received all the funds required to be paid to IPIC by Dec 31 under the Settlement with the Minister of Finance (Inc) Malaysia and 1Malaysia Development Bhd and the Consent Award made on May 9, 2017.”
"The process to pay is being initiated early because the funds are in place and 1MDB wants to avoid any administrative trip-ups that could result from the banking holidays at the end of the year," one Malaysian government official familiar with the settlement was reported by ST as saying.
1MDB had earlier agreed to pay US$1.2 billion in two instalments. The first instalment of US$600 million was originally due on July 31, but 1MDB missed the deadline as it had to obtain “regulatory approvals” and paid only in August.
See: 1MDB and Abu Dhabi's IPIC to settle debt dispute
