Friday, April 8, 2016

1MDB IPIC Debt Settlement Agreement

The PAC has finally tabled its report to the Dewan Rakyat yesterday 7 April.

When all is altogether finally said and done, there is this other matter of the 'Debt Settlement Agreement' between 1MDB and IPIC,  the  International Petroleum Investment Company, a company listed on the London Stock Exchange.  

1MDB president and executive director, Arul Kanda, has been reported by Bloomberg in an interview, to be leaving 1MDB and we will come back to him later.

The pertinent subject at hand is this  'Debt Settlement Agreement' signed last year, 28 May 2015.

A report on this agreement was published by The National, UAE headlined "Abu Dhabi’s Ipic to pay interest on 1MDB bonds as Malaysia clears officials", 8 October 2015.

It reported the following, 

"Ipic agreed in May to grant 1MDB $1bn in cash to settle some debt, assume $3.5bn of debt and forgive an undisclosed sum of debt owed to Ipic by 1MDB, in return for a transfer of assets to Ipic."
This is corroborated, as quoted in The National report above verbatim, in the unaudited accounts of IPIC for the financial year ending  2015, screenshot below.

The relevant statement in the Note is thus, "by 30 June 2016, IPIC is to have received a transfer of assets with an aggregate value of an amount which represents the sum of the Cash Payment, the Assumption of Debt and the Debt Forgiveness".

Reading the Note, I take that to mean Cash Payment of USD 1 billion, Assumption of Debt of USD 3.5 billion. Debt Forgiveness may refer to USD 431,326,000.00 (amount outstanding, I stand corrected and it could be more). 

The total for only the Cash Payment and Assumption of debt amounts to close to USD 5 billion or  RM 19,600,000,000.00 (1 USD = RM 3.92)

Interestingly, the Bloomberg report above, quoted Arul Kanda as saying, 
"From my perspective, I’m done,” said Kanda, a trained lawyer. “Everything’s signed. Legal agreements are there, they’re binding. I’m leaving the company" with available funds, he said.
The question arises, has 1MDB already transferred the assets to IPIC - signed, sealed and delivered as Arul Kanda mentions?  

Assets, cash or in kind totaling RM 19.6 billion?

If anyone hadn't notice, the time frame, to deliver the assets is - 30 June 2016, barely 3 months ahead.

To be read in conjunction with 1MDB press release "1MDB-IPIC Debt Settlement Arrangements"

Petroleum Investmen

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