Malaysia's 1MDB secures $1 bln from Abu Dhabi fund ahead of loan deadline

* Securing funds a major step in 1MDB restructuring - govt

* Abu Dhabi's IPIC previously guaranteed 1MDB unit bonds (Add 1MDB context, details on funding)

KUALA LUMPUR, May 29 (Reuters) - Malaysia's loss-making state fund 1MDB has signed a deal securing $1 billion in funding from Abu Dhabi, days ahead of a looming deadline to repay a loan of that size, in what the government said was a significant step toward easing debt worries and advancing a long-awaited restructuring.

Malaysia's finance ministry said in a statement on Friday that Abu Dhabi's International Petroleum Investment Company (IPIC) and its Aabar Investments unit will supply the on or before June 4. That will allow 1MDB to repay a $975 million loan to a global banking syndicate, it said.

The deal brings short-term respite to the fund, dogged by years of controversy over its management of funds and the $11.6 billion in borrowings it has amassed to finance the purchase of power assets. The fund's debt has been a burden on state finances that has also weighed on the ringgit currency and on Malaysia's sovereign credit rating.

"This agreement marks a significant step towards reducing 1MDB's overall debt levels, and is a crucial part of the rationalisation plan I presented to cabinet earlier (Friday)," second finance minister Ahmad Husni Hanadzlah said in a statement.

Friday's funding announcement came amid reports that the international lenders, led by Deutsche Bank, were concerned about the collateral secured to the $975 million loan and planned to ask 1MDB to pay up before the borrowing falls due.

Ahmad Husni said the ministry expects plans to restructure 1MDB to be implemented "in full by early next year".

In February announced a strategic review which will see two of its property developments, Tun Razak Exchange and Bandar Malaysia, established as standalone companies. The pair of companies will raise equity via third-party investors, with proceeds to be used for capital expenditure and to reduce 1MDB's debt.

IPIC was one of the guarantors of some $3.5 billion of bonds issued in 2012 by 1MDB units to pay for the purchase of power assets from Genting Bhd and the Tanjong investment vehicle owned by Malaysia's second-richest man, Ananda Krishnan.

Phone calls seeking comment from IPIC outside usual business hours went unanswered. (Reporting by Yantoultra Ngui; Editing by Kenneth Maxwell)