Sapura Energy says no adjustments needed after unqualified opinion on financials

Sapura Energy’s current liabilities have exceeded their current assets by RM14.5 billion and RM2.2 billion respectively, and the group faces severe liquidity constraints.

PETALING JAYA:

Sapura Energy Bhd said “no adjustments are needed for the recoverability and classification of assets or liabilities” after its external auditor raised the issue of it continuing as a going concern in an unqualified opinion on the state of the oil company’s finances for the financial year 2024 (FY2024).

“The going concern basis for preparing financial statements is appropriate and no adjustments were necessary to be made to the financial statements relating to the recoverability and classification of the carrying amount of assets or the amount and classification of liabilities,” it said in a stock exchange filing.

The oil and gas services company said it expects a mutually beneficial scheme of arrangement will likely achieve the majority support of creditors.

“This is because it will be able to offer higher recovery under the scheme of arrangement compared to the recovery under liquidation, and that the group has sufficient funds to sustain its operations until such a scheme is concluded,” it added.

Sapura Energy said this in response to its external auditor’s unqualified opinion with material uncertainty on the group’s ability to continue as a going concern for its audited financial statements for the financial year ended Jan 31 (AFS 2024).

Ernst & Young PLT has indicated the existence of material uncertainties in the group’s AFS 2024 and that they may cast significant doubt on Sapura Energy’s ability to continue as a going concern.

The auditor said Sapura Energy’s current liabilities exceeded their current assets by RM14.5 billion and RM2.2 billion respectively, and the group faces severe liquidity constraints.

It noted that the company is highly dependent on obtaining extensions for restraining orders and favourable outcomes of the legal claims for the terminated engineering and construction projects.

Sapura Energy said the successful and timely implementation of the proposed scheme of arrangement requires it and its companies to secure approvals from at least 75% of the scheme creditors in the court-convened meetings.

“Should the going concern basis for the preparation of financial statements be no longer appropriate, adjustments would have to be made in the financial statements relating to the amounts and classification of the assets and liabilities,” it said adding that no such adjustments have been made to the financial statements.

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Sapura Energy says no adjustments needed after unqualified opinion on financials

It said this in response to its external auditor raising the issue of it continuing as a going concern in an unqualified opinion on the oil company’s finances for FY2024.