KUALA LUMPUR: Malaysia's debt-ridden state investment firm 1Malaysia Development Berhad (1MDB), has entered into a binding agreement with Abu Dhabi's International Petroleum Investment Company (IPIC) and its subsidiary Aabar Investments.
The deal will see IPIC make a payment of US$1b to 1MDB on or before June 4, 2015, money that will go towards paying off the power-to-energy fund's US$975m loan from a syndicate of international bank lenders.
1MDB has been at the centre of controversy in Malaysia over its massive debt pile and allegations of financial mismanagement by its CEOs and advisory board, headed by Malaysian Prime Minister Najib Razak.
Malaysia's auditor-general and Public Accounts Committee are both conducting probes into 1MDB's accounts.
In a statement, the Finance Ministry said the IPIC deal "marks a significant step towards reducing 1MDB’s overall debt levels, and is a crucial part of the rationalisation plan" for the firm, a plan that's expected to be implemented in full by early 2016.
The Finance Ministry said the agreement with IPIC also includes "further measures to comprehensively address the various financial asset and liability transactions between the parties".
God save my country!