Page 6 - AsianOil Week 13 2022

AsianOil COMMENTARY AsianOil

Sapura saga continues to unfold

Malaysia’s debt-ridden Sapura Energy continues to explore ways to avoid

bankruptcy after state-owned Petronas denied reports that it could buy a

significant stake in the services firm

PROJECTS & SEVERAL developments in the ongoing saga Borrelli as its non-independent and non-ex-
COMPANIES of debt-ridden Malaysian contractor Sapura ecutive director on March 25. And on April 1
Energy have come in recent days. the company secured a temporary deferment
WHAT: Last week, Malaysia’s state-owned Petronas from lenders for outstanding interest and cou-
Sapura continues to denied reports that it was in talks with the coun- pon payments for its MYR10.3bn ($2.4bn)
explore ways to avoid try’s government over the potential acquisition multi-currency financing (MCF) facilities. The
bankruptcy after of a “significant” stake in Sapura. This came deferment will be provided over the course of a
Petronas denied reports after growing speculation over the possibility of three-month restraining order awarded to the
that it could buy a stake Petronas buying a stake in Sapura. Indeed, days company by a court on March 10 to give it time
in the company. before, former Malaysian Prime Minister Najib to sort out its restructuring plan.
Razak had urged the government to protect
WHY: Sapura from bankruptcy. He made suggestions Under pressure
The COVID-19 pandemic on ways to go about this, including proposing Sapura’s woes predate the coronavirus (COVID-
exacerbated Sapura’s that Sapura be acquired either by Petronas or by 19) pandemic, though they have been exacer-
cash flow issues. the Malaysian government’s sovereign wealth bated by it. The Malaysian Reserve cited sources
fund, Khazanah Nasional. familiar with the matter as citing cash flow and
WHAT NEXT: But with Petronas denying that it is in discus- management structural issues as being among
The services firm has sions on taking over Sapura, other options will the challenges Sapura had been struggling with
appointed a restructuring have to be considered. “long before” the pandemic hit. The exposure of
specialist as its non- Earlier in March, Sapura posted an operating Sapura’s order book to the transportation and
independent and non- loss of MYR2.2bn ($522.5mn) and a post-tax installation (T&I) sector also meant that it saw
executive director as it loss of MYR8.9bn ($2.1bn) for the financial year a greater impact from the pandemic than many
considers its next steps. that ended on January 31, 2022. of its competitors. This is because offshore T&I
It has not all been bad news for the services work often requires hundreds of workers, and at
firm, however. Local media reported that Sapu- the height of the pandemic this translated into
ra’s shares had jumped by 14.3% on news that it significant extra costs for PCR tests and quaran-
had appointed restructuring specialist Cosimo tine in hotels for those workers.

P6 www. NEWSBASE .com Week 13 01•April•2022