MALAYSIAN sovereign fund 1Malaysia Development Bhd has remitted the final tranche of its US$1.2 billion (RM4.9 billion) debt to International Petroleum Investment Co (IPIC) ahead of the December 31 due date.

In a statement to the London Stock Exchange today, IPIC said the settlement involved IPIC, Malaysia’s Minister of Finance Inc and 1MDB.

“Further to the announcement of August 30, 2017, IPIC has now received all the funds required to be paid to IPIC by December 31, 2017, under the settlement with the Minister of Finance Inc of Malaysia and 1MDB, and the Consent Award made on May 9, 2017.”

The announcement confirms a report by The Malaysian Insight last week that said the final payment of US$630 million had been made to IPIC on December 21.

1MDB and IPIC struck up a relationship in 2012, when the former guaranteed two bonds worth US$1.75 billion each for 1MDB to raise funds for the purchase of power-generation assets.

In return, 1MDB was to make collateral payments to IPIC.

At the end of 2015, however, problems arose when IPIC/Aabar and 1MDB could not agree over a sum of missing funds due to IPIC and the Malaysian state investor failing to settle a US$1.2 billion loan from Abu Dhabi.

Both sides were unable to reconcile the missing monies, with Malaysia insisting that it had repaid US$3.5 billion to IPIC subsidiaries, which maintained that they did not receive most of the funds.

In May last year, Abu Dhabi and Malaysia agreed to settle the dispute by private arbitration in London, the result of which is that 1MDB would pay IPIC US$1.2 billion in three instalments, the last of which was handed over on December 21. – December 27, 2017.