Saturday, February 24

Sapura Energy Receives Support for Debt Restructuring Scheme

Credit: TheKapital.my

Sapura Energy Bhd, classified under Practice Note 17 (PN17), has achieved a significant breakthrough as a considerable majority, constituting at least 75% of its financiers, have given preliminary approval for its proposed debt restructuring scheme. This initiative aims to address the company’s substantial debt of approximately RM10.3 billion, including amounts owed to trade creditors, particularly Malaysian small and medium enterprises (SMEs) totaling around RM1.5 billion.

In a statement released on Wednesday, the oil and gas service provider disclosed that it had obtained written confirmation from the Corporate Debt Restructuring Committee, marking a pivotal step in managing its debt burden.

Sapura Energy reported a notable surge in its net profit for the third quarter ended October 31, 2023 (3QFY2024), amounting to RM30.89 million or 0.19 sen per share compared to RM10.18 million or 0.06 sen per share in the corresponding period last year. This rise was primarily attributed to reduced depreciation, increased profits from joint ventures and associates, and favorable foreign exchange gains resulting from the appreciation of the US dollar against the Malaysian ringgit.

However, the company witnessed a 13.42% decline in quarterly revenue, dropping to RM1.1 billion from RM1.28 billion in 3QFY2022 due to decreased revenue in the engineering & construction (E&C) business segment, primarily stemming from slower project advancements.

For the nine-month period ending in 2023 (9MFY2023), Sapura Energy’s net profit more than doubled to RM219.78 million from RM99.53 million year-on-year. Conversely, revenue slipped by 4.06% to RM3.2 billion from RM3.33 billion in 9MFY2022, primarily attributed to reduced revenue from its E&C division owing to slower project progress.

Datuk Mohd Anuar Taib, the group’s CEO, expressed confidence following the approval-in-principle, indicating a positive trajectory towards overcoming the milestones necessary to exit PN17 status. The company had previously requested a six-month extension from Bursa Securities to submit its regularisation plan, extending from November 30, 2023, to May 31, 2024.

Taib acknowledged the challenges faced and expressed gratitude to supportive partners while acknowledging that not all stakeholders could extend their support.

Sapura Energy’s shares closed 11.11% higher at 5 sen on Wednesday, with a trading volume of 9.61 million shares. The company’s market capitalization stood at RM798.95 million.

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