KUALA LUMPUR, July 31 — Prime Minister Datuk Seri Najib Razak attributed 1Malaysia Development Berhad (1MDB) and Abu Dhabi’s International Petroleum Investment Company (IPIC) out-of-court settlement last April to "good faith negotiations”.

Najib, who is also finance minister, said that among others, some of the settlement terms agreed upon is for 1MDB to make "certain payments” to IPIC, and take responsibility on all future interest and principal payments for two bonds issued by companies under the 1MDB Group, which ends in 2022.

"In addition, 1MDB and IPIC have also agreed to execute negotiations honestly (good faith negotiations) in relation to the monies paid by 1MDB to certain entities,” Najib said in a written reply dated July 25.

He added that IPIC will still remain as guarantors for both the bonds.

On April 24, 1MDB confirmed that it has reached a deal with IPIC, to settle a debt dispute worth RM5.8 billion.

"These obligations will be met by 1MDB, primarily via monetisation of 1MDB-owned investment fund units,” the statement read.

"1MDB is pleased to confirm that a first tranche monetisation of approximately US$50 million (RM225 million) has been received, in cash,” it added.

News that a settlement was reached had been reported the week prior, with Singapore daily Straits Times citing executives familiar with the deal said the major component of the settlement will be for Malaysia to repay Abu Dhabi US$1.2 billion by the end of this year.

This amount represents a loan and accumulated interest charges on a package that IPIC handed to 1MDB in July 2015.

1MDB said the arbitration settlement and monetisation of investment fund units represents the resolution of a significant challenge facing the troubled fund.

It also said that the dispute’s closure is a major part of the 1MDB rationalisation plan, which is now at its final stages of conclusion.