PUTRAJAYA, March 13 — Prime Minister Datuk Seri Anwar Ibrahim today defended the move to inject RM1.1 billion into Sapura Energy, saying this is to pay what is owed to mostly Bumiputera vendors rather than save the troubled oil-and-gas firm’s top executives.
The Malaysia Development Holding Sdn Bhd’s (MDH) infusion of funds into the publicly listed Sapura as led to perception of a government bailout of the firm, which Anwar previously rejected while in the Opposition.
Speaking at the Ministry of Finance’s monthly assembly here, Anwar said channelling money into Sapura Energy “was not an easy decision”, but was necessary to prevent a financial ripple effect in the oil and gas supply chain.
Anwar also noted that the infusion was through MDH’s subscription of Sapura’s redeemable convertible loan stocks.
“Will this money be burnt just like that? No. This injection is meant as a capital loan for the new management, with the hope it would manage the company better and make profits so it could then repay this RM1.1 billion injection,” said Anwar, who is also the finance minister.
“When we criticised Sapura Energy years ago what did I say? I said don’t bail out because the same management is still there, their salaries are millions of ringgit. Then I asked where the forensic audit was. Now we brought in EY and put in a proper and transparent process before the decision (to inject money) was made,” he added.
Sapura Energy, a publicly listed firm now under PN17 status, has faced financial issues as since the turn of the decade.
The company said last month it had managed to secure creditors’ approval for its proposed debt restructuring scheme that would include its 22 subsidiaries as it aims to repay the RM10.8 billion owed to nine lenders of its multi-currency financing facilities, and RM1.5 billion in outstanding trade creditor payments.
In a Bursa filing Tuesday, Sapura Energy said the finance ministry, via its special purpose vehicle MDH, would be subscribing to its redeemable convertible loan stocks worth RM1.1 billion.
The latest round of fund injection and court-approved debt restructuring plan will be a part of Sapura Energy’s regularisation plan, as the company works to exit its PN17 status and reposition itself for long-term growth.
“I’d like to tell you that this decision was not at all easy,” Anwar said about the funding as he addressed MoF staff this morning.
“I was among those who vehemently opposed bailing out large companies,” he added.
“Back in 1997/1998, I was those who opposed the bail out of a shipping company linked to the son of a prime minister, so, I do have experience in this, because we were bailing out people who live lavishly yet manage a company incompetently.”
