International Petroleum Investment Company (IPIC) will allocate a total of US$1billion (RM3.66 billion) to national strategic investment company, 1Malaysia Development Berhad (1MDB) to pay its debt amounting US$975 million (RM3.57 billion) to international syndicated loan facilities.

The matter was confirmed by Second Finance Minister, Datuk Seri Ahmad Husni Hanadzlah in a statement Friday after the tabling of 1MDB roadmap or 1MDB rationalisation at the Cabinet meeting in Putrajaya, here today.

According to Ahmad Husni, 1MDB has sealed a pact with IPIC and its subsidiary, Aabar Investments (Aabar) for IPIC to make the payment, on or before 4 June 2015.

The agreement encompasses the next measures to address the entire financial assets and transaction between several quarters, the next information to be announced in the near future,” he said in the statement.

Ahmad Husni also explained that the agreement will be the next big move to ease 1MDB debt, and an important component in the rationalisation effort, discussed at the Cabinet, Friday following an announcement by 1MDB, in February 2015, of the conclusion of a strategic review.

He also said, the rationalisation strategy will be fully executed early next year.

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Ahmad Husni also stressed as already been achieved with Edra Energy, Tun Razak Exchange (TRX) and Bandar Malaysia would be established as standalone companies, with full autonomy and accountability for their operational and financial performance.

“Whilst options are being pursued with respect to the monetisation of Edra Energy, the Ministry of Finance will remain a key shareholder in TRX and Bandar Malaysia, which will raise equity via third party investors,” he said in the statement.

“Proceeds raised will be used for capital expenditure and to reduce 1MDB’s debt.

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Subsequently, the Ministry of Finance had tabled the 1MDB roadmap at the Cabinet meeting Friday, in its quest to manage perceptions plaguing the government-owned agency.

Cabinet ministers’ vehicles were seen approaching the Prime Minister’s office at approximately 9am on Friday. Several hours later at 12.40pm, the barricade of vehicles was seen leaving the premises.

On the 1MDB roadmap, Ahmad Husni viewed the essence of the plan will be able to dodge negative perceptions towards the government-owned company.

Ahmad Husni also said that the agreement marks a significant step towards reducing 1MDB’s overall debt.