LAST_UPDATESun, 22 Jul 2018 9pm

1MDB Pays Abu Dhabi Fund S$477 Million Ahead Of Aug 12 Deadline

Pic: ReutersPic: ReutersKUALA LUMPUR: Malaysia's state fund 1Malaysia Development Bhd (1MDB) has wired US$350 million (S$477 million) to Abu Dhabi's International Petroleum Investment Co (IPIC), the first tranche of a debt repayment scheme, banking sources said.

They said 1MDB made the payment on Thursday (Aug 10), ahead of the deadline on Saturday, the sources told Malaysian Insight.

The debt-laden state fund missed the original July 31 deadline and a five-day extension after that and was given an extra week until Saturday to pay US$310 million.

"IPIC received US$350 million instead of US$310 million and got it early, " the report quoted a banker source as saying.

The Malaysian Insight understands that the money was wired from 1MDB's account in Malayan Banking Berhad (MBB), Malaysia's largest banking group.

The sum owing is the first of two payments amounting to US$1.2 billion due to IPIC before the end of the year, according to the terms of the private arbitration in April in London.

Under the deal, 1MDB and the Finance Ministry also assumed responsibility for all future interest and principal payments under two bonds, worth US$3.5 billion in total, according to Malaysian Insight.

Missed payments by 1MDB are a concern for foreign investors, who own a significant share of government bonds in the South-east Asian nation. Allegations of fraud involving 1MDB have already spooked investors by weighing on Malaysia's currency.

1MDB was started by Prime Minister Najib Razak in 2009 soon after he became Malaysia's leader. He has been battling allegations that money from the fund had been stolen by him and his associates.

Last year, Najib was cleared of any wrongdoing in the 1MDB scandal by Malaysia's Attorney- General.

The Malaysian leader admitted there were "lapses in governance" in the state fund, but maintained that government investigations found no wrongdoing, and that 1MDB is undergoing rationalisation to rid itself of its heavy debts.

-Straits Times