HONG KONG: Abu Dhabi’s sovereign wealth fund has given 1Malaysia Development Berhad (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 July 31, 2017, in August 2017. It did not specify a date in August.
It said all payments to IPIC would be made from the proceeds of the 1MDB rationalization 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 Inc. and 1MDB to remedy their non-payment before MOF Inc. 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 rationalization program, after the fund was linked to a multi-billion dollar global money laundering scandal.
One such asset sale — a $1.7 billion Bandar Malaysia property deal that was executed as part of the rationaliazation plan — collapsed in May. As part of the agreement with IPIC, 1MDB was to pay $1.2 billion in two installments. A second payment is due by the end of this year. 1MDB and Malaysia’s Ministry of Finance will also assume responsibility for all future interest and principal payments under two bonds worth $3.5 billion in total.
The agreement was reached after the Malaysian fund defaulted on its bonds in 2016, sparking a dispute with IPIC, which asked a London court to arbitrate a claim totalling some $6.5 billion.
IPIC was merged with Mubadala earlier this year.
Bonds linked to 1MDB remained largely unmoved on Tuesday.
1MDB’s 4.4 percent bonds due 2023 were trading slightly weaker at 91/93 while the bonds due 2022 were down half a point at 108.3/108.9 cents on the dollar.
“Despite the various guarantees and debt consolidation plans there is 1MDB debt outstanding, and the debt still presents a contagion risk to the government,” said Moody’s Analyst Christian de Guzman.
“We don’t have a clear picture of what the liability structure looks like but it is much smaller than the last publicly disclosed level of 4 percent of GDP in 2014,” he said.
Abu Dhabi gives new deadline as 1MDB misses $600 million payment
Abu Dhabi gives new deadline as 1MDB misses $600 million payment
Closing Bell: Saudi main index closes higher at 10,596
RIYADH: Saudi equities closed higher on Tuesday, with the Tadawul All Share Index rising 43.59 points, or 0.41 percent, to finish at 10,595.85, supported by broad-based buying and strength in select mid-cap stocks.
Market breadth was firmly positive, with 170 stocks advancing against 90 decliners, while trading activity saw 161.96 million shares change hands, generating a total value of SR3.39 billion.
Meanwhile, the MT30 Index closed higher, gaining 6.52 points, or 0.47 percent, to 1,399.11, while the Nomu Parallel Market Index edged marginally lower, slipping 3.33 points, or 0.01 percent, to 23,267.77.
Among the session’s top gainers, Al Masar Al Shamil Education Co. surged 9.99 percent to close at SR26.20, while Saudi Cable Co. jumped 9.98 percent to SR147.70.
Cherry Trading Co. rose 4.18 percent to SR25.44, and United Carton Industries Co. advanced 4.09 percent to SR26.46.
Al Yamamah Steel Industries Co. also posted solid gains, climbing 4.07 percent to end at SR32.70.
On the downside, Emaar The Economic City led losses, slipping 3.55 percent to SR10.32, followed by Derayah REIT Fund, which fell 2.92 percent to SR5.31.
Derayah Financial Co. declined 2.13 percent to SR26.62, while United International Holding Co. retreated 1.96 percent to SR155.20, and Gulf Union Alahlia Cooperative Insurance Co. eased 1.92 percent to SR10.70.
On the announcements front, Red Sea International Co. said it signed a SR202.8 million contract with Webuild S.P.A. to provide integrated facilities management services for the Trojena project at Neom.
The agreement covers operations and maintenance for the project’s Main Camp and Spike Camp, including accommodation and housekeeping, catering, security, IT and communications, utilities, waste management, fire safety and emergency response, as well as other supporting services.
The contract runs for two years, with the financial impact expected to begin in the first quarter of 2026. Shares of Red Sea International closed up 0.99 percent at SR34.74.
Al Moammar Information Systems Co. disclosed that it received an award notification from Humain to design and build a data center dedicated to artificial intelligence technologies, with a total value exceeding 155 percent of the company’s 2024 revenue, inclusive of VAT.
The contract is expected to be formally signed in February 2026, underscoring the scale of the project and its potential impact on the company’s future revenues.
MIS shares ended the session 2.82 percent higher at SR156.70, reflecting positive investor sentiment following the announcement.
