This article first appeared in The Edge Malaysia Weekly on December 2, 2024 - December 8, 2024

Late last week, cash-strapped Practice Note 17 (PN17) counter Sapura Energy Bhd (KL:SAPNRG) announced that both its chairman Datuk Mohammad Azlan Abdullah and group CEO and executive director Datuk Mohd Anuar Taib were resigning due to “other personal commitments” and “personal endeavours” respectively. Azlan is to step down on Jan 31, 2025, while Anuar will leave this Dec 31.

Sapura Energy has their replacements ready. Shahin Farouque Jammal Ahmad has been appointed as interim chairman, while Muhammad Zamri Jusoh will be the group CEO. The two entrants, especially Zamri, might have big shoes to fill, though.

Sapura Energy has been struggling hard to keep its head above water for several years even though the oil and gas industry has been out of a prolonged downturn for more than two years. This begs the question: Is this the right time for a changing of the guard?

According to news reports quoting Anuar, Sapura Energy is targeted to exit PN17 status by 2026.

On Nov 18, Sapura Energy applied for a six-month extension until May 31, 2025, to submit a plan to regularise its financial condition that would enable it to exit PN17. The company has sought several extensions since falling into PN17 at end-May 2022. It is certainly under pressure to work out a regulation plan. With the change in leadership, will it be able to submit its regularisation plan on time? And will Bursa grant the extension?

Another pertinent question that its minority shareholders have is probably whether Sapura Energy needs another recapitalisation exercise.

For the second financial quarter ended July 31, the company suffered a net loss of RM5.23 million on revenue of RM2.38 billion.

Commenting on its prospects in the earnings results, Sapura Energy says it is currently facing challenges due to lack of access to working capital and bank guarantee facilities, which in turn affected order book replenishment. These constraints have impacted the company’s ability to secure two major contracts worth more than RM4.5 billion. Given this, its top priority is to complete the restructuring scheme to minimise the prolonged impact on the business, it says.

To complicate matters further, the company is currently embroiled in lawsuits and winding-up petitions. Try as it may, there seems to be no end to Sapura Energy’s financial woes.

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