1MDB Says It's in Default After Missing Interest Payment
2016-04-26 01:32:23.129 GMT
By Shamim Adam
(Bloomberg) -- 1Malaysia Development Bhd. said it didn't pay $50 million of interest on a $1.75 billion bond amid a dispute with Abu Dhabi's sovereign wealth fund on who should be making the payment.
The company said it's withholding an interest payment because Abu Dhabi's International Petroleum Investment Co., which is the co-guarantor of the bonds maturing in 2022, hadn't met the obligation either, according to an e-mailed statement ahead of a deadline on Monday night in New York.
"Whilst 1MDB has the funds to have made the interest payment, it is 1MDB's position, as a matter of principle, that it was IPIC's obligation to do so," the company said. "Until IPIC accepts that all obligations have been met, 1MDB is obliged to withhold payments and will seek legal recourse and resolution."