April 18, 2016
International Petroleum Investment Company (IPIC) said on Monday a June agreement to provide financial support to Malaysia’s 1MDB had been terminated after the troubled sovereign vehicle failed to meet obligations to the Abu Dhabi fund.
IPIC said in a bourse filing in London the Malaysian state fund and the Asian country’s Ministry of Finance had failed to meet obligations including to pay $1.1 billion plus interest and was now in default.
While the obligations of IPIC and its subsidiary, Aabar Investments, under the June agreement had now been terminated, the Abu Dhabi fund still expected the Malaysian side to honor its commitments.
IPIC was now considering all its options to remedy the default, including referring the matter to the appropriate dispute resolution forum, the statement added.
Under the June agreement, IPIC agreed to provide $1 billion in cash as well as assume $3.5 billion of 1MDB debt. It also forgave an undisclosed amount of debt owed to IPIC by 1MDB, in exchange for assets which have not been named.