This article first appeared in The Edge Malaysia Weekly on June 10, 2024 - June 16, 2024
Sapura Energy Bhd (KL:SAPNRG), in which Permodalan Nasional Bhd owns a 41.1% stake, could breathe a sigh of relief last week as the High Court granted it a nine-month extension to the convening and restraining orders that were set to expire on June 10. In short, it now has nine more months to work on its debt restructuring scheme without creditors knocking on its door.
KNM Group Bhd’s (KL:KNM) luck isn’t as good, though. The Italian government has again rejected its plan to sell its entire stake in FBM Hudson Italiana SpA (FBM Hudson). This is the second time that KNM has failed to obtain the Golden Power clearance from the Italian government to sell the stake in FBM Hudson, which manufactures heat exchangers and high-pressure equipment.
The latest deal was expected to fetch about €16.5 million (about RM84.99 million). The rejection by the Italian authorities will add financial stress on KNM.
Back home, KNM has applied for a further time extension from Bursa Malaysia to submit its plan to regularise its Practice Note 17 status. It is seeking a 12-month extension until April 30, 2025.
In its latest monthly update on its PN17 status on June 4, its board of directors said the application was being considered by the stock exchange.
Meanwhile, the status of its plan to list its so-called crown jewel, Borsig Group, is unknown.
As at March 31 this year, KNM’s borrowings totalled RM1.286 billion — of which RM1.281 billion were short-term debts including term loans of RM743.6 million and revolving credit (secured) of RM527.7 million — compared with its equity of RM410.76 million, taking into account its accumulated losses of RM1.6 billion.
Many oil and gas companies have recovered from the prolonged industry downturn that started in late 2014, with improved earnings and ballooning order books.
Yet, both Sapura Energy and KNM are still licking their wounds.
As the saying goes, time heals all wounds. Will this be true for the two former giant oil and gas companies that have an overseas presence?
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