Malaysian Government's default of December 31 2015 on debt owed IPIC was NOT due to any dispute or error-Government simply had no money
by Ganesh Sahathevan
The following documents and statements in the public domain suggest that the Malaysian Government's default on debt owed IPIC, of December 31 2015, was not due to any dispute or error.Government simply had no money
As reported by The Edge:
There is one crucial item on the term sheet, which is that 1MDB has to transfer the amount that IPIC paid, the cash plus the interests — US$1.15 billion — by Dec 31, 2015, according to Arul. As such, he said: "actually, we were in default since December". But he questioned why IPIC waited until now to make the announcement."It should have been made immediately after the default as it’s a large amount. Why wait until April to say you don’t own Aabar BVI?"
However , the Auditor-General presented an interim 1MDB audit report to the PAC on or about
9 July 2015. The PAC was concerned with payments made long before 2015,so clearly IPIC's default notice was not a reaction to the PAC report.In fact it is beginning to look as if both IPIC and the Malaysian Government agreed that there was fraud on the Malaysian part, even if it did involve IPIC's officers,and that the Malaysian Government would make good IPIC's loss with a payment of "U.S.$1,102,725,000 plus interest accruing under the terms of the Binding Term Sheet".
There was no need for IPIC to issue any notice of default given that IPIC was to receive assets from 1 MDB by 30 June 2016. In short, in December 2015, the Malaysian Government defaulted because it had no money.
It does appear that the IPIC asset swap was agreed to with full knowledge of the payments to the fake/bogus Aabar.
IPIC 's declaration can be taken at face:
IPIC has performed all of its obligations to date under the Binding Term Sheet. 1MDB and MOF have failed to perform certain payment and other obligations owed by them to the IPIC group pursuant to the terms of the Binding Term Sheet, including the obligation to pay to IPIC U.S.$1,102,725,000 plus interest accruing under the terms of the Binding Term Sheet.
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RNS Number : 7064P
IPIC GMTN Limited
10 June 2015
1MDB Debt Settlement Arrangements
On 28 May 2015, International Petroleum Investment Company (IPIC), Aabar Investments PJS (Aabar), Minister of Finance, Inc., Malaysia (MOF) and 1Malaysia Development Berhad (1MDB) entered into a binding term sheet that provides for the following principal matters:
· on 4 June 2015, IPIC provided US$1 billion to 1MDB for 1MDB to utilise immediately to settle certain of its liabilities (the Cash Payment);
· from 4 June 2015, IPIC has assumed the obligations to pay (on an interim basis) all interest due under two IPIC guaranteed 1MDB financings amounting to US$3.5 billion in aggregate principal amount (the Notes);
· upon the completion of the transfer of assets as described below, IPIC will directly assume liability for all payment obligations under the Notes(theAssumption of Debt) and forgive certain financial obligations of the 1MDB Group to the IPIC Group (the Debt Forgiveness); and
· 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.
1MDB and MOF have agreed to perform the obligations contemplated in the binding term sheet and to indemnify IPIC and Aabar for any non-performance, and vice versa.
IPIC has met the Cash Payment and will meet the interim interest payments under the Notes from existing liquidity available to IPIC.
This information is provided by RNS
The company news service from the London Stock Exchange
RNS Number : 4672V
IPIC GMTN Limited
18 April 2016
1MDB Debt Settlement Arrangements
On 10 June 2015, IPIC GMTN Limited issued an announcement (RNS Number 7064P) relating to a binding term sheet dated 28 May 2015 (the Binding Term Sheet) and other ancillary documents entered into between International Petroleum Investment Company (IPIC), Aabar Investments PJS (Aabar), Minister of Finance, Inc., Malaysia (MOF) and 1Malaysia Development Berhad (1MDB), in connection with:
1- the extension by the IPIC group of financial support to the 1MDB group at the request of both 1MDB and MOF;
2- the acknowledgement by 1MDB and MOF of the liabilities owed by the 1MDB group to the IPIC group; and
3- the conditional settlement, release and discharge of certain obligations and liabilities between the parties.
Status of the Binding Term Sheet
IPIC has performed all of its obligations to date under the Binding Term Sheet. 1MDB and MOF have failed to perform certain payment and other obligations owed by them to the IPIC group pursuant to the terms of the Binding Term Sheet, including the obligation to pay to IPIC U.S.$1,102,725,000 plus interest accruing under the terms of the Binding Term Sheet.
As a result, 1MDB and MOF are in default pursuant to the terms of the Binding Term Sheet and IPIC's and Aabar's obligations under the Binding Term Sheet have terminated.
1MDB and MOF continue to be bound by their respective obligations under the terms of the Binding Term Sheet, including their continued indemnification of IPIC and Aabar for any non-performance under the Binding Term Sheet and in relation to any claims which may be made against IPIC pursuant to the guarantees entered into by IPIC in respect of certain 1MDB group bond issuances.
Following such default, IPIC and Aabar have engaged with, and extended opportunities to, both 1MDB and MOF to remedy their defaults without success. IPIC and Aabar have now reserved all of their rights under the Binding Term Sheet and are considering their options in relation to this dispute, including referring the matter to the appropriate dispute resolution forum.
This information is provided by RNS
The company news service from the London Stock Exchange
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