Malaysia faces bailout question after Abu Dhabi fund terminates debt deal
Any govt aid to 1MDB will pile more pressure on Najib, already facing allegations of graft and mismanagement
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Kuala Lumpur
THE Malaysian government on Tuesday was facing the prospect of having to bail out the scandal-tainted state fund 1MDB, after a US$4.6 billion debt deal with an Abu Dhabi sovereign fund collapsed this week.
The International Petroleum Investment Company (IPIC) said on Monday that 1Malaysia Development Berhad's (1MDB) had failed to make a US$1.1 billion payment, and so was terminating last June's debt deal. "The government wouldn't want to risk having a default on its books, so if it came down to it, they would want to keep a clean record," said Krystal Tan, a Singapore-based economist at research firm Capital Economics, talking about risk of a bailout for 1MDB.
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