KUALA LUMPUR: 1Malaysia Development Bhd (1MDB) and Abu Dhabi-based International Petroleum Investment Company (IPIC) have reached a settlement via arbitration proceedings at the London Court of International Arbitration (LCIA).
As per the settlement, 1MDB said it will make certain payments to IPIC and will assume responsibility for all future interest and principal payments for two bonds issued by 1MDB Group companies due in 2022.
"These obligations will be met by 1MDB, primarily via monetisation of 1MDB-owned investment fund units.
"1MDB confirms that a first tranche monetisation of approximately US$50 million has been received, in cash," the state-owned strategic development company said in a statement today.
This arbitration settlement and monetisation of investment fund units represents the resolution of a significant challenge, and is a major part of the 1MDB rationalisation plan, which is now at its final stages of conclusion, it said.
In response, Datuk Seri Tengku Sarifuddin Tengku Ahmad, press secretary to Prime Minister Datuk Seri Najib Razak, said the government is pleased that IPIC and 1MDB have resolved their differences in an amicable manner.
“We also note the monetisation of all 1MDB-owned investment fund units.
“These significant events represent the continued positive progress made by 1MDB, which is nearing the completion of its rationalization programme," he said in a statement issued today.
Last month, Reuters reported that private talks between 1MDB and IPIC have reached deadlock.
IPIC is seeking $6.5 billion from 1MDB and took the case to the LCIA last June but both companies have been trying to thrash out a private settlement since then, Reuters report said.