1MDB says to engage with bondholders following default

KUALA LUMPUR - 1Malaysia Development Bhd (1MDB) has hired Alvarez & Marsal Asia Ltd as it starts an engagement process for its US$ denominated bondholders following the default on the US$1.75 billion (S$2.4 billion) 1MDB Energy (Langat) Ltd.

It said on Monday while Alvarez & Marsal Asia would be its financial advisor, it has also hired D.F. King Ltd, an Orient Capital company as the identification and information agent to directly carry out the bondholder identification and registration process. It also said D.F. King would identify and register bondholders of the Langat notes, whose fixed rate is 5.75 per cent and are due 2022.

"1MDB will now actively engage with all Holders in order to outline the next steps of the process; explain the background of the dispute; clarify why 1MDB has taken the position to not make the interest payment on the Langat Notes; and reiterate that 1MDB has a rationalisation plan in place that enables the company to meet its existing debt obligations," it said.

1MDB has also requested D.F. King to launch a microsite, which contains all relevant information and will include regular updates for bondholders. Once registered, registrants will be able to submit questions online through the website.

It added that a call for all US$ denominated bondholders would take place on May 23.

While 1MDB undertakes the exercise, it also said it was committed to working openly with International Petroleum Investment Company (IPIC) to resolve the dispute.

1MDB welcomes dialogue with all Holders and therefore requests them to disclose their identities and holdings to D.F. King via one of the two options, below:

1) provide the information to D.F. King via their custodian bank to Euroclear or Clearstream, Luxembourg (as appropriate) by means of the disclosure event in place by no later than deadline imposed by Euroclear or Clearstream; or

2) provide the information directly to D.F. King via the website

1MDB also gave an assurance that all information received will be treated in the strictest confidence and will be used solely for the purposes of the 1MDB and its advisers.