PETALING JAYA: Sapura Energy Bhd (SEB) entered into a conditional funding agreement or CFA with Malaysia Development Holding Sdn Bhd (MDH) yesterday, with the latter subscribing up to RM1.1bil in nominal value of redeemable convertible loan stocks (RCLS) in SEB.
MDH, a special-purpose vehicle of the Minister of Finance (Incorporated) has specified that proceeds of the subscription are only intended to be used for the settlement or payment of liabilities owed by the SEB group to Malaysian service providers operating in or supporting the oil and gas (O&G) sector in the country.
SEB group chief executive Muhammad Zamri Jusoh said the group, as a Malaysian company supporting over 2,000 local vendors, recognises its responsibility to preserve the Malaysian O&G ecosystem.
“Our Malaysian vendors are predominantly small and medium enterprises or SMEs who have endured significant financial hardship during and after the Covid-19 lockdowns and it had always been our intention to fully settle overdue payables to them.
“We are extremely grateful to MDH for providing this funding, which will allow us to fulfil our commitment to our Malaysian vendors,” he said. This funding follows strong support from SEB’s creditors for its Composite Scheme of Arrangement (Schemes) involving SEB and 22 of its subsidiaries (Scheme companies) under Section 366 of the Companies Act 2016.
In a statement yesterday, SEB said between Feb 21 and 27, the Scheme companies concluded 52 separate court convened meetings, during which various classes of creditors, including financing institutions providing the group’s multi-currency financing facilities and trade creditors (Scheme Creditors), voted overwhelmingly in favour of the Schemes.
Under the Schemes, admitted claims of Scheme creditors who fall within the class of preferred unsecured creditors will, after the waiver of penalty charges, late payment charges and interest or profit accruing from Jan 31, 2022 to the restructuring effective date (RED), be settled fully in cash within 90 days after the occurrence of the RED.
The RED is expected to fall in August 2025 at the earliest, subject to fulfilment of certain conditions precedent.
The statement also said Scheme creditors who are Malaysian service providers in the O&G sector are included in the class of preferred unsecured creditors.
The Malaysian Oil, Gas & Energy Services Council (MOGSC) has given its nod to the proposed resolution, as it had said in an earlier statement that the proposed full repayment was a significant step in safeguarding the livelihoods of the vendors.
“The solvency of SEB has far-reaching implications, not just for vendors but also for the thousands of skilled workers whose livelihoods depend on the strength of Malaysia’s O&G ecosystem.
“By honouring its financial commitments, SEB not only reinforces stability within the supply chain, but also sets a crucial precedent for responsible corporate stewardship,” the MOGSC said.
The Schemes took effect yesterday following the lodgement of an office copy of the Court Order by the Scheme companies with the Companies Commission of Malaysia. SEB said the Court Order forms a critical element of its proposed regularisation plan, as it progresses efforts to achieve a sustainable turnaround.–THE STAR
