KUALA LUMPUR (Aug 8): International Petroleum Investment Co PJSC (IPIC) has granted 1Malaysia Development Bhd (1MDB) an extension until Aug 31 to pay up US$628.75 million it owed the Abdu Dhabi wealth fund — provided it pays US$310 million (RM1.33 billion) by Aug 12.

The announcement confirms an earlier statement by Treasury Secretary General Tan Sri Dr Mohd Irwan Serigar Abdullah that IPIC has granted 1MDB an extension after it failed to make the debt settlement payment to IPIC by July 31.

In a filing to the London Stock Exchange, IPIC said it has granted 1MDB and its guarantor, Ministry of Finance (Inc) Malaysia (MoF Inc), until Aug 31 to complete the payment obligations.

"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 Aug 12," said IPIC.

On Aug 1, IPIC gave a cure period of five working days for both 1MDB and MoF Inc to settle the non-repayment, before the two parties become subject to additional obligations to IPIC and Aabar Investments PJS.

1MDB said in a statement that it was still waiting to receive funds from its rationalisation plan — namely, the monetisation of its fund units held under Brazen Sky (reportedly US$940 million) and 1MDB Global Investment Ltd (estimated US$1.5 billion).

The fund, it said, was due in July but will now be received in August "due to the need for additional regulatory approvals".

The payment is the first tranche of 1MDB's US$1.2 billion settlement it owed to IPIC after the Abu Dhabi wealth fund assisted 1MDB to meet its debt obligations since May 2015. The second tranche — worth US$602.73 million — is due by year-end.