PETALING JAYA: Permodalan Nasional Bhd (PNB) issued an eight-point statement to justify that the government’s RM1.1bil capital injection into Sapura Energy Bhd
is not a “bailout”.
PNB is an existing significant shareholder of Sapura Energy.
The first point highlighted in the statement was that the funds from the government will be exclusively used to repay local vendors. It said Sapura Energy has more than 2,000 vendors, many of which are small and medium enterprises and employ approximately 59,000 core employees in the oil and gas (O&G) industry.
Second, the investment helps to preserve the Malaysian O&G industry.
“Preserving Sapura Energy and the broader oil and gas ecosystem is essential for the continuity of projects that contribute to national revenue and energy security.”
Third, the RM1.1bil investment will positively catalyse economic growth.
Without Sapura Energy and its local vendors, PNB argues that the work will have to be outsourced to foreign and non-Malaysian providers, thus leading to payments flowing out of Malaysia.
“The investment will ensure the country’s oil and gas work will continue to be done by Malaysians, benefiting Malaysian gross national income by RM1.1bil and positively impacting our currency exchange rate.”
Fourth, the investment will facilitate the completion of one of the largest corporate and debt restructuring in Malaysia.
Fifth, the investment is undertaken in line with global restructuring best practice.
Sixth, the investment decision has gone through due diligence and review process.
Seventh, the investment is consistent with what other countries had undertaken to preserve their strategic industry.
“Examples include the government of Singapore’s investment in the restructuring of Sembcorp through Temasek as well as the South Korean’s investment in the restructuring of Daewoo Shipbuilding.”
Eighth, the investment by Malaysia Development Holdings Sdn Bhd (MDH) is repayable.
“The investment in Sapura Energy redeemable convertible loan stocks generates fixed profit payment to MDH and is redeemable with the option to enjoy the upside through conversion into shares should Sapura Energy’s share price perform in the future.”
