Report: MoF Inc considering financial support for Sapura Energy
Sources say Finance Minister (Incorporated) MoF Inc may provide financial assistance to struggling Sapura Energy Bhd. – File photo of Shafwan Zaidon
By John Bunian
Saturday, May 21, 2022 7:20 p.m. GMT
KUALA LUMPUR, May 21 – Finance Minister (Incorporated) MoF Inc may provide financial assistance to struggling oil and gas giant Sapura Energy Bhd, sources say.
Sources familiar with the developments within the unit which is 100% owned by the Ministry of Finance said The edge that the intervention would be made under the MoF (Inc) Act, which empowered the Minister of Finance to enter into commercial transactions for social and strategic purposes.
“As far as I know, MoF Inc is going to step in[tohelpoutSapuraEnergyWhat’sbeingdiscussednowissomesortofassistanceprogramitcouldbe’somekindofgrantanditcouldbeannouncedsoon’asourcesaidinthelatesteditionofThe edge.
He also said Finance Minister Tengku Datuk Seri Zafrul Aziz had been working on the proposal for several weeks.
However, the report said details on the government entity that would spearhead the aid were not yet available.
Among the 70 companies in the MOF Inc stable are Urusharta Jamaah Sdn Bhd, which took over the assets of the Lembaga Tabung Haji pilgrim fund; 1Malaysia Development Bhd; SRC International Sdn Bhd; development finance institutions Bank Pembangunan Malaysia Bhd, Bank Pertanian Malaysia Bhd and Small Medium Enterprise Development Bank Malaysia Bhd; rail operator Keretapi Tanah Melayu Bhd; UDA Holdings Bhd; the sovereign wealth fund Khazanah Nasional Bhd; and the national oil company Petroliam Nasional Bhd (Petronas).
Once a star in the O&G industry and worth over RM30 billion, Sapura Energy has seen its value drop to just RM500 million currently.
The company was one of two, including Serba Dinamik Bhd, to epitomize the reversal of fortune among previously high-flying Malaysian companies.
Such was the interest in the issue that Sapura Energy was one of the top three topics former Prime Minister Datuk Seri Najib Razak and opposition leader Datuk Seri Anwar Ibrahim debated in a rare public contest. at the beginning of the month.
During the debate, Najib said it was imperative that Sapura Energy be rescued for the benefit of the entire Malaysian economy, and proposed that state oil company Petronas take over the service provider to safeguard local jobs.
According to The Edge Weekly, Petronas has denied the takeover of Sapura Energy despite preliminary talks about it.
An industry watcher also told the business weekly that such a deal would be highly unusual.
“So, a client who takes over an entrepreneur? Doesn’t look good, does it? the person was quoted as saying.
For its financial year ended 31 January 2022, Sapura Energy recorded a net loss of RM8.89 billion on revenue of RM4.13 billion.
At the time, the company had RM717.75 million in liquid assets, short-term borrowings of RM10.66 billion and no long-term debt commitments. It had also accumulated losses of RM13.52 billion.