The counter surged as much as 33.33% or 1.5 sen to 6 sen from last Friday’s close of 4.5 sen.
Last week, the financially distressed company received a much-needed reprieve after it was granted an extension to stall legal action by a large number of creditors, essentially keeping the wolves from the door.
In a Bursa filing last Wednesday, the company announced it and 22 subsidiaries have been given three-month orders from March 11 restraining creditors from commencing or restarting legal proceedings.
This was to allow the group to engage with creditors in their debt restructuring efforts without being distracted by threat of legal proceedings.
Catching investors’ attention today was unconfirmed reports over the weekend of an alleged “white knight” riding on the back of RM1.8 billion in capital injection to save Sapura.
To this date, reports indicate that Sapura has amassed RM16.7 billion in liabilities due in a year and RM146.9 million beyond that.
Hence, the breathing room given by the court to restructure its debt is much welcomed and taken positively by minority shareholders and investors alike.
In an accompanying statement on March 8, Sapura Energy CEO Anuar Taib said the company will look for a “fair landing” for its financiers, trade creditors and ensure that small and medium-sized Malaysian enterprises are not short-changed.
Moving forward, Sapura Energy said it would need to undertake several corporate exercises, including a share capital reduction, the consolidation of its share capital, issuance of new shares and issuance of irredeemable convertible unsecured Islamic debt securities (ICUIDS) as part of its new plan.
The Sapura saga
Sapura is an upstream oil and gas company, which at its peak was the second largest integrated oil and gas services company in the world.
The company formerly known as Sapura Kencana Petroleum Bhd was formed as a merger in 2012. In 2014, its market capitalisation swelled to RM28 billion, about 40 times more than what it is today.
However, the oil and gas player has yet to turn a profit since July 31, 2017, racking up an RM8.9 billion loss in the financial year ended Jan 31, 2022, the worst loss in Malaysian corporate history.
After the oil-crash in mid-2014, Sapura’s fortunes followed suit. The company has been loss-making ever since, with 2017 being the only exception.
Its main stakeholders in Sapura are Permodalan Nasional Bhd (PNB) with a 41.43% stake, and parent company Sapura Holdings with 12.94%.
A white knight is expected to allow Sapura to restructure its RM10.3 billion debt under the multi-currency facilities (MCF). It owes another RM5.12 billion to its vendors.
The court documents stated that the white knight could be an integral part of its restructuring with multiple speculations of a middle eastern company coming to the rescue.
The banks involved in the MCF agreement are Maybank Investment Bank, CIMB Bank Bhd, RHB Bank Bhd, AmBank Islamic Bhd, Export-Import Bank of Malaysia Bhd, United Overseas Bank Ltd, ING Bank, Standard Chartered Bank and Sumitomo Mitsui Banking Corp.
The biggest lender is Maybank, in which PNB has a 44.29% stake.
It is in everyone’s best interest to make sure things don’t go belly up for Sapura. Compromises and sacrifices will eventually have to be made to seek a resolution to this seemingly insurmountable debt problem.
Today’s brief rally is perhaps an indication that the market desires an amicable solution to the Sapura conundrum.
At the close of trading today, Sapura was up half-a-sen or 11.11% to 5 sen, giving it a market capitalisation of RM719 million.