Ipic and 1MDB settle dispute

Ipic asked a London court to arbitrate last year in a dispute with 1MDB in which the Abu Dhabi group claimed about $6.5 billion.

Abu Dhabi’s International Petroleum Investment Co (Ipic) and a Malaysian state fund have resolved a debt dispute with a conditional US$1.2 billion deal.

Under the terms of the agreement announced on Monday to the London Stock Exchange, 1Malaysia Development Berhad (1MDB) will pay the $1.2bn in two instalments in July and December to Ipic after proceedings at the London Court of International Arbitration.

Ipic, together with its Aabar Investments unit, asked the court to arbitrate in June last year in a dispute with 1MDB over its failure to perform its contractual obligations towards them. Ipic and Aabar claimed about $6.5bn in the suit.

Ipic had guaranteed bonds issued by 1MDB, the two companies said in separate statements, but now 1MDB and Malaysia’s Ministry of Finance will assume responsibility for all future interest and principal payments under two bonds issued by 1MDB Group companies, Ipic said in a filing in London.

These include the $1.75bn 5.75 per cent fixed rate notes due 2022 and $1.75bn fixed rate 5.99 per cent notes due 2022, both issued by 1MDB entities.

1MDB said payments will be made to Ipic by monetising investment fund units.

The agreement is conditional on the Arbitration Tribunal in London making a “consent award” by May 31.

* Reuters

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