KUALA LUMPUR: Sapura Energy Bhd
(SEB) has entered into a conditional funding agreement (CFA) with Malaysia Development Holding Sdn Bhd (MDH), securing up to RM1.1bil in nominal value of redeemable convertible loan stocks (RCLS).
In a statement, SEB said the investment marks a key milestone in its financial restructuring, reinforcing its path toward long-term stability and operational recovery.
MDH, a special purpose vehicle of the Minister of Finance (Incorporated), has stated that the proceeds from the subscription will be solely used to settle liabilities owed by the SEB Group to Malaysian service providers in the oil and gas sector.
It said the funding represents a crucial step in restoring the financial stability of Malaysian vendors within the oil and gas ecosystem, which has taken years to develop.
SEB Group chief executive officer Muhammad Zamri Jusoh said the company acknowledges its responsibility to support over 2,000 local vendors and safeguard the Malaysian oil and gas ecosystem.
“Our Malaysian vendors are predominantly small & medium enterprises (SME) 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.
“We are extremely grateful to MDH for providing this funding, which will allow us to fulfil our commitment to our Malaysian vendors,” he said in the statement.
The investment follows strong creditor support for SEB’s Composite Scheme of Arrangement (the “Schemes”) under Section 366 of the Companies Act 2016, involving SEB and 22 subsidiaries.
Between 21 and 27 February 2025, the Scheme Companies held 52 court-convened meetings, where various creditor classes, including multi-currency financing institutions and trade creditors, voted overwhelmingly in favour of the Schemes.
Under the Schemes, admitted claims from Scheme Creditors classified as Preferred Unsecured Creditors will be settled fully in cash within 90 days after the Restructuring Effective Date (RED), following the waiver of penalty charges, late payment fees, and interest or profit accrued from Jan 31, 2022 to the RED.
The RED is expected to occur in August 2025 at the earliest, subject to the fulfilment of certain conditions. Malaysian service providers in the oil and gas sector are included in the Preferred Unsecured Creditors category.
On 6 March 2025, the High Court of Malaya in Kuala Lumpur approved the Schemes under Section 366(3) and (4) of the Companies Act 2016.
Following the lodgement of an office copy of the court order with the Companies Commission of Malaysia earlier today, the Schemes have officially taken effect and are now binding on the Scheme Companies and their Scheme Creditors.
Similar lodgements have also been completed with the relevant regulatory authorities in other jurisdictions where the Scheme Companies are incorporated.
The Court Order forms a critical element of SEB's proposed regularisation plan, as it progresses efforts to achieve a sustainable turnaround. In developing the proposed Regularisation Plan, SEB is undertaking a comprehensive due diligence process in alignment with the Malaysian Code on Corporate Governance 2021.
The Proposed Regularisation Plan will comply with Malaysian laws and regulations, including the Capital Markets and Services Act 2007, the Companies Act 2016, and Bursa Securities' Main Market Listing Requirements.
Independent experts will conduct legal and financial due diligence, along with a thorough review of internal controls and risk management. This ensures responsible investment and protects stakeholder interests.
“We are diligently working on a robust Regularisation Plan, which will bring us one step closer to exiting our status as a PN17 company”, Zamri said.
“We see SEB’s turnaround as part of the revitalisation of the Malaysian OGSE sector, ensuring it is better positioned to support the nation’s energy security and sustainability goals, ultimately contributing to Malaysia’s economic development.”
