Once Critical Of Bailout Anwar Throws Sapura Energy Rm1 1b Lifeline

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Three years ago, in a debate with then prime minister Najib Abdul Razak, Anwar Ibrahim was critical of a proposal for the government to bailout debt-addled Sapura Energy Bhd.
The then opposition leader had argued that any talk of a bailout can only be done after a forensic audit on Sapura to determine if the company - which Permodalan Nasional Berhad (PNB) had heavily invested in - had been mismanaged.
Now, as the prime minister and finance minister, Anwar has thrown Sapura Energy a RM1.1 billion lifeline - although it is unclear if the forensic audit he once pushed for had been carried out prior to the decision.
In a Bursa filing yesterday, Sapura Energy announced it had received the RM1.1 billion as an investment from Malaysia Development Holding Sdn Bhd (MDH) - a special purpose vehicle under the Minister of Finance (Incorporated).
The investment is to be exclusively used to pay off the oil and gas company's debts to its 2,000 vendors.
"Our Malaysian vendors are predominantly small and medium enterprises who have endured significant financial hardship during and after the Covid-19 pandemic and it had always been our intention to fully settle overdue payables to them," Sapura Energy group CEO Zamri Jusoh said in the Bursa filing.
"We are extremely grateful to MDH for providing this funding, which will allow us to fulfil our commitment to our Malaysian vendors," he added.
Troubled waters
Sapura Energy landed into trouble around 2019 when it began to record annual losses.
At the end of May 2023 - six months after Anwar took office - external auditors Ernst & Young expressed its unqualified opinion with material uncertainty related to Sapura Energy's ability to continue as a going concern.
However, The Edge reported in March that year that the company had received backing from a "white knight" - speculated to be a Middle Eastern oil and gas company - that would be providing Sapura Energy with financial support with a capital injection of RM1.8 billion.
Last month, it was reported that Sapura Energy secured approval from its creditors for a proposed debt restructuring scheme, which received court approval last Thursday. - Mkini

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