KUALA LUMPUR (June 13): Sapura Energy Bhd has been granted an extension of up to November 30, 2023, to submit its regularisation plan to the relevant regulatory authorities to enable it to get out of Practice Note 17 (PN17) or financially distressed category.
In a filing with Bursa Malaysia on Tuesday (June 13), Sapura’s principal adviser MIDF Amanah Investment Bank Bhd announced on behalf of the group that Bursa Malaysia had given the extension to Sapura vide its letter dated June 12, 2023.
Sapura said that the extension of time is needed given the complexity of the company’s overall reset plan.
“Sapura Energy’s debt restructuring efforts, which underpins its regularisation strategy, are progressing positively,” the group added.
Earlier this month, the High Court of Malaya granted Sapura and 22 of its wholly owned subsidiaries an extension period of up to nine months, until March 10, 2024, on both its convening and restraining orders.
The orders were initially issued on March 8 and set to expire on June 11.
The group said that the nine-month extension is necessary to allow the group to finalise proposed schemes with its financiers and other creditors, as part of the group’s debt restructuring plan to resolve its unsustainable debt and overdue payables.
Sapura’s primary creditors are the financiers for its multi-currency financing (MCF) facilities. To reduce its unsustainable debt, Sapura and its 22 subsidiaries, who are obligors under the MCF facilities, have engaged with the primary creditors with the help of the Corporate Debt Restructuring Committee (CDRC) to mediate the negotiations.
The proposed restructuring schemes will include a potential financial investment of RM1.8 billion which would further the group’s goal of preserving the industry ecosystem.
“The court-convened meetings with the creditors are envisaged to be held by the end of October 2023”, Sapura added.
In a report earlier this month, Sapura said they had secured ten contracts across the Asia-Pacific and Atlantic regions since last December with a combined value of RM1.4 billion.
Sapura Energy group chief executive officer Datuk Mohd Anuar Taib said the group is deploying some of its assets to new regions, enabling the group to secure new clients and overcome limitations brought on by financial constraints.
Mohd Anuar added that the shift in strategy bore early results for the financial year ended Jan 31, 2023 (FY2023), as the group recorded an operating profit of RM751 million, against an operating loss of RM2.2 billion in FY2022, despite the limited working capital and macroeconomic challenges.
As of writing (2.47pm), Sapura’s shares stood unchanged at 3.5 sen, giving the group a market capitalisation of RM489.36 million.