Sapura Energy proposes regularisation plan to exit PN17, slash RM12.1bil debt by more than half
The oil and gas sector services company said the final plan, expected to be submitted soon, includes a debt restructuring to resolve about RM12.1 billion in total borrowings and trade liabilities.
It also entails a capital reconstruction to set off against the company's accumulated losses.
Sapura Energy group chief executive officer Muhammad Zamri Jusoh said the regularisation plan represents the most viable pathway to turn around the company's financial condition.
"We are confident the successful execution of the plan will return the company to profitability and restore confidence among stakeholders," Zamri said.
According to Sapura Energy, the regularisation plan comprises four key components designed to restore its financial health and position it to uplift its PN17 status.
The proposed capital reconstruction involves a 99.99 per cent capital reduction to offset accumulated losses and a 20-to-1 share consolidation to enhance share trading price and reduce price volatility.
The comprehensive debt restructuring will reduce Sapura Energy's total borrowings from about RM10.8 billion to RM5.6 billion, yielding substantial interest savings and reduced financial burden.
Sapura Energy said the plan also incorporates a proposed fund-raising initiative where Malaysia Development Holding Sdn Bhd (MDH) will subscribe up to RM1.1 billion in redeemable convertible loan stocks (RCLS).
This will be earmarked to settle outstanding payments to vendors in the Malaysian oil and gas ecosystem.
"MDH will become a major shareholder upon full conversion of the RCLS, which will result in MDH holding more than 33 per cent of Sapura Energy's enlarged share capital.
"MDH will seek an exemption from the Securities Commission from the requirement to make a mandatory general offer to Sapura Energy's existing shareholders.
"This exemption will be subject to the approval of non-interested shareholders at an extraordinary general meeting (EGM), to be convened at a later date," it said.
With the strategic initiatives and successful implementation of the proposed regularisation plan, Zamri said Sapura Energy is confident in its path to operational recovery, improved financial health and eventual upliftment from PN17 status.
"We are hopeful that this plan will not only enable Sapura Energy's recovery but also catalyse the growth of the country's energy ecosystem," he added.
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