KUALA LUMPUR (Nov 12): Sapura Energy Bhd (KL:SAPNRG) said on Tuesday it has accepted the terms and conditions set forth by its multi-currency financing (MCF) creditors for the proposed disposal of its 50% stake in SapuraOMV Upstream Sdn Bhd to TotalEnergies Holdings SAS for US$705.3 million (RM3.37 billion).
Among the conditions is that net proceeds from the disposal will be held in a segregated account held by Sapura Energy’s wholly owned subsidiary Sapura Upstream Assets Sdn Bhd (SUA) at either Malayan Banking Bhd (KL:MAYBANK) or Maybank Islamic Bank Bhd, according to Sapura Energy's bourse filing on Tuesday.
SUA will then create a first ranking fixed charge or priority claim over the net sale proceeds and the segregated account in favour of Maybank Investment Bank as the security agent for the MCF creditors. The charge will remain in place until the restructuring process is finalised, with the funds designated to pay down Sapura Energy’s debt as part of its ongoing debt restructuring plan.
The group had filed applications to the High Court to seek validation of the disposal and the creation of the security arrangements.
On Nov 4, the court granted Sapura Energy the necessary approvals and ruled that the creation of the security arrangement was valid and beneficial to its overall creditors, even though it can be considered a preference for the MCF financiers. The court also confirmed that the proposed disposal did not require court approval to proceed.
The company also affirmed that the net sale proceeds from the proposed disposal would be used solely for reducing Sapura Energy’s liabilities, even if the planned debt restructuring scheme is not approved or sanctioned by the court.
Back in April, Sapura Energy said SUA had entered into a conditional sale and purchase agreement to divest its 50% equity interest in SapuraOMV to TotalEnergies for US$530.3 million (RM2.53 billion) cash and US$175 million relief on debt obligations.
The proposed divestment would result in a net gain on disposal of about RM793 million upon completion, Sapura Energy said then.
Sapura Energy bought SapuraOMV for US$898 million back in 2014 from Newfield Exploration Co, before selling half its stake to OMV AG in 2018 for up to US$975 million.
SapuraOMV’s assets include operating interests in Blocks SK408 (40%) and SK310 (30%) offshore Sarawak, both of which produced an average of 30,000 barrels of oil equivalent per day in the financial year ended Jan 31, 2023 (FY2023) based on annual report figures.
The cash portion of US$530.3 million, plus debt relief of US$175 million, would provide temporary relief for Sapura Energy, which is in the midst of developing a regularisation plan to address its Practice Note 17 status.
As at end-July, Sapura Energy had cash of RM1.72 billion on current borrowings of RM10.94 billion, and current trade and payables of RM5.34 billion. Its order book stands at RM5.9 billion.
Accumulated losses amounted to RM17.24 billion, which resulted in a shareholders’ deficit of RM3.69 billion, up from RM3.01 billion a year before.
Shareholders of Sapura Energy include Permodalan Nasional Bhd via Amanah Saham Nasional Bhd (41.263%). Brothers Capital Sdn Bhd, linked to its former CEO and president Tan Sri Shahril Shamsuddin and his brother Datuk Shahriman Shamsuddin, owns a 12.94% indirect stake in the listed entity. Shahril also owns a 1.09% direct stake in Sapura Energy.
Aside from SapuraOMV, Sapura Energy owns fabrication yards in Lumut, Perak (273 acres or 110.48 hectares), Labuan (88 acres), and Teluk Kalong, Terengganu (20 acres).
It also has five semi-tender rigs and six tender assist rigs, and vessels including five derrick lay vessels, six pipelay vessels, one subsea construction vessel, two anchor handling tug supply vessels, and other offshore support vessels.
In the first six months ended July 31, 2024 (6MFY2025), the group reported net profit of RM76.9 million on revenue of RM2.38 billion.
During the financial period, financing costs totalled RM415.78 million, against net operating cash flow of RM172.28 million.
Shares of Sapura Energy closed 0.5 sen or 14.3% lower at three sen on Tuesday, giving it a market capitalisation of RM551.28 million.