Focus on Sapura Energy before the release of materials

KUALA LUMPUR (April 22): Sapura Energy Sdn Bhd investors are awaiting a major announcement hinting at a midday break last Friday by the oil and gas (O&G) services company. Sapura Energy is in the process of developing a normalization plan to address Practice Note 17 status. .

The company’s shares, which provide upstream operations and maintenance, offshore manufacturing and drilling services, have been voluntarily suspended from trading since 2:30 p.m. last Friday.

The suspension signals a possible sale of its upstream arm SapuraOMV Upstream Sdn Bhd, which it owns 50%.

The remaining 50% stake in SapuraOMV is in the process of being acquired by TotalEnergies from Austria’s OMV Aktiengesellschaft for US$903 million (RM4.32 billion). OMV sold the stake as part of the group’s strategy to shift its focus away from Australia.

OMV acquired SapuraOMV in 2018 for USD 540 million, taking a 50% stake and repaying an additional USD 350 million in intercompany debt.

Sapura Energy is reportedly seeking US$1.2 billion for a stake in SapuraOMV.

SaspuraOMV operates gas fields SK310 (30% interest) and SK408 (40% interest) in Sarawak. It also owns 40% of Block SB412 offshore Sabah and 30% of Block 30 offshore Mexico, as well as other offshore exploration permits in Western Australia and New Zealand’s Taranaki Basin.

The trading price of TotalEnergies’ 50% stake in SapuraOMV is greater than Sapura Energy’s market capitalization of RM826.92 million, based on the last traded share price of 4.5 sen before trading suspension.

As at end-January, Sapura Energy’s total capital was negative by RM4.19 billion, compared with cash of RM1.45 billion and total borrowings of RM10.98 billion.

The group is in the process of developing a normalization plan to address its balance sheet position. For now, the court has granted a stay until June 10 from legal action by creditors, including local vendors and creditors of the company’s RM10.3 billion multi-currency loan facility.

As of December last year, at least 75% of these creditors have given the necessary in-principle approval to the company’s proposed debt restructuring plan.

Sapura Energy’s shareholders include Permodalan Nasional Bhd (40.73%) via Amanah Saham Nasional Bhd. Brothers Capital Sdn Bhd, which is associated with Tan Sri Shahril Shamsuddin and Datuk Shahriman Shamsuddin, holds 9.18% of the listed company’s indirect shares. Mr. Sharir also owns 0.95% of Sapura Energy’s direct shares.

Besides SapuraOMV, Sapura Energy’s other assets include manufacturing yards in Lumut, Perak (273 acres or 110.48 hectares), Labuan Island (88 acres), and Teluk Karon, Terengganu (20 acres).

We have five derrick-laying vessels, six pipe-laying vessels, one subsea construction vessel, two anchor-handling tug supply vessels, and other marine support vessels. According to its official website, Sapura Energy also has five semi-tender rigs and six tender-assist rigs.

The stock of the company, which still has a significant presence across the local upstream oil and gas ecosystem, follows a quarterly net profit of RM146.1 million for the first quarter ended April 30, 2023. , reaching 6 sen per share in Q3 2023 (Q1 2024), the strongest since 2019.

However, as all segments were in the red, the group remained in the red in FY2024, with a full-year net loss of RM728.4 million on sales of RM1.1 billion.

Responding to the results, chairman Datuk Mohamad Azlan Abdullah said in March that Sapura Energy was “not out of the woods yet”, adding that the group’s lack of access to finance was a major challenge for both its engineering and construction and business units. He pointed out that this is worsening the already difficult business conditions. and the maintenance department.

The group, which started its latest restructuring plan in 2022, had an order book of RM5.4 billion at the end of October last year. As the overall activity and outlook for the O&G industry in the country continues to improve, attention will also be focused on the progress of Sapura Energy’s restructuring.

Also read:
Sapura Energy trading suspended pending announcement

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