Malaysia’s Sapura Energy Secures $250 Million Bailout to Repay Debts
Malaysia’s troubled offshore services player Sapura Energy has successfully secured a RM1.1bn ($250m) bailout from the government to settle debts owed to vendors. The company announced this development in a filing with Bursa Malaysia on Wednesday, revealing that the Ministry of Finance had agreed to provide financial assistance to the company.
The investment, facilitated through Malaysia Development Holding, involved a subscription to just under $250m worth of redeemable convertible loan stocks, subject to specific conditions. This injection of funds represents a significant step in Sapura Energy’s ongoing financial restructuring efforts.
Notably, Malaysia Development Holding, acting as a special purpose vehicle of the Minister of Finance, stipulated that the funds from the subscription must be utilized for clearing liabilities owed to Malaysian service providers in the oil and gas sector. This move aims to restore financial stability to Malaysian vendors within the industry.
Sapura Energy, a key supporter of Malaysian vendors, has around 2,300 vendors under its wing, with 1,800 of them being small and medium enterprises. Over the past five years, the company has awarded contracts totaling RM7.3bn ($1.65bn) to Malaysian vendors, showcasing its commitment to supporting local businesses.
In recent developments, Sapura Energy secured multiple contracts worth RM3.2bn ($721m) for its drilling business at the end of February, further bolstering its operations and financial outlook.