1MALAYSIA Development Berhad (1MDB) has until August 12 to pay part of the US$603 million (RM2.6 billion) owed to the International Petroleum Investment Company (IPIC).

This was the condition for extending the full payment deadline from July 31 to August 31, IPIC said in a short statement to the London Stock Exchange today.

“This extension is subject to MoF Inc. and 1MDB making payment of not less than US$310 million of the full amount due on or before August 12,” it said.

1MDB chairman and Treasury secretary-general Irwan Serigar Abdullah said earlier today that the state investor fund had been given until the end of August to pay up after its initial five-day extension had lapsed.

Prime Minister Najib Razak blamed the late payment on “technical issues” and not because 1MDB could not pay.

However, a source told The Malaysian Insight that the delay was caused by banks, both local and international, not wanting to handle transactions related to 1MDB.

The source also said the Finance Ministry is looking at various options to repay IPIC.

The US$603 million is the first of two payments amounting to US$1.2 billion due before the end of the year, according to the terms of the private arbitration in April in London.

Under the deal, 1MDB and the Finance Ministry also assumed responsibility for all future interest and principal payments under two bonds, worth US$3.5 billion in total. – August 8, 2017.