Abu Dhabi gives new deadline as 1MDB misses $600 million payment

Chris Jung | NurPhoto | Getty Images

The 1MDB (1Malaysia Development Berhad) logo pictured on a bus window in Kuala Lumpur, Malaysia.

Abu Dhabi’s sovereign wealth fund has given 1Malaysia Development Berhad’s (1MDB) five days to make a $600 million payment, which the troubled Malaysian state fund failed to pay on Tuesday, further complicating a dispute hanging over Southeast Asia’s third-biggest economy.

The 1MDB fund said in a statement it was committed to meeting its obligations to Abu Dhabi’s International Petroleum Investment Company (IPIC), originally due on 31 July 2017, in August 2017. It did not speciify a date in August.

It said all payments to IPIC would be made from the proceeds of the 1MDB rationalisation plan, under which it is selling assets. It said the delay was also due to the need to get more “regulatory approvals”.

But Mubadala, which now owns IPIC, said in a separate statement on Tuesday that 1MDB and the Malaysian finance ministry (MoF) have just five days to resolve the non-payment.

“Under the Settlement, there is a five business day cure period for MOF and 1MDB to remedy their non-payment before MOF and 1MDB become subject to additional obligations to IPIC and Aabar,” Mubadala said.

Malaysia dissolved 1MDB’s advisory board last year, and its assets were either shifted to the government or sold off as part of the rationalisation programme, after the fund was linked to a multi-billion dollar global money laundering scandal.