By Chan Quan Min
Strategic investment fund 1Malaysia Development Bhd (1MDB) has paid up to US$250 million (RM833 million) to Aabar Investments PJS to have an unexercised option over its power assets cancelled.
Under option agreements between 1MDB and Aabar signed in 2012, Aabar has the right to subscribe for up to a 49% equity stake in Powertek Investment Holdings, a holding company for 1MDB’s power assets acquired from Ananda Krishnan’s Tanjong Energy.
The terms of the agreement allow Aabar, an investment vehicle of the Abu Dhabi state, to exercise the option at any time up to 2022.
1MDB Energy Holdings, a subsidiary of 1MDB, took up a bridging loan facility worth US$250 million to “finance the acquisition of options granted to Aabar,” according to notes to 1MDB’s annual report for the year ended March 2014.
The annual report in question was submitted a month late and was only made available to the public via the Companies Commission of Malaysia’s information system today.
The bridging loan facility is secured by a guarantee from the borrower, 1MDB Energy Holdings and its subsidiary companies as well as a charge on the borrower’s share capital.
1MDB has obtained in writing Aabar’s agreement in terminating the option.
It is not know what the unexercised option held by Aabar was worth before it was cancelled.
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