1MDB's engagement with its US dollar-denominated bondholders is a good move towards restoring confidence in the market, says Deputy Finance Minister Johari Abdul Ghani.

He said bondholders must be told about the dispute between 1MDB and the Abu Dhabi-based International Petroleum Investment Company (IPIC) which had led to the default of the notes.

“They must communicate this with bondholders. If they don't understand (the issues), then they will panic unnecessarily," Johari told reporters after launching a workshop on 'Developing an Islamic Infrastructure Investment Platform' in Kuala Lumpur today.

Yesterday, 1MDB announced that it had hired Alvarez & Marsal Asia Ltd as its financial adviser as it began an engagement process with bondholders following the default on the US$1.75 billion 1MDB Energy (Langat) Ltd (Langat Notes) fixed rate 5.75 percent notes due 2022.

It also has hired DF King Ltd as the identification and information agent to directly carry out the bondholder identification and registration process.

1MDB said a call for all the said bondholders would take place on May 23.

The strategic development company said it was committed to working openly with IPIC to resolve the dispute.

Johari said the ministry would look into the issue once 1MDB and IPIC had sorted out the dispute at the corporate level.

"We do not want to interfere with this because it is between two corporate entities to go and sort out their problems.

"We are very mindful that 1MDB is owned by the Finance Ministry, we will definitely want to know the details as to why this happened and if any action is required to be taken, we will do the necessary," he added.

- Bernama