Sapura Energy has won over 75% of its debt holders to support a restructuring scheme, while also reporting profits for the last three quarters.
Sapura said it was in talks with holders of 10.3 billion ringgit ($2.2bn) of debt. The company is working to restructure this “unsustainable level of debt” and the amount it owes to creditors.
It plan aims to provide a “fair and equitable solution” for everyone, but with a particular emphasis on small and medium enterprises in Malaysia. The debt includes around 1.5bn ringgit ($321 million) in claims from vendors.
Sapura Energy has been in talks on renegotiating its debt since September 2022. Approval from 75% of creditors allows the company to move into court-convened meetings. The company had hoped to begin these in October.
Sapura Energy CEO Datuk Mohd Anuar Taib expressed his gratitude to all involved. “With the approval-in-principle, we are quite confident that we are now approaching the last few milestones of this journey,” Datuk Anuar said.
The aim is to move the company into a more sustainable financial position and get it off the list of companies in financial distress, known as Practice Note 17.
Earlier this year, the High Court gave Sapura Energy – and 22 subsidiaries – protection from creditors until March 10, 2024.
The company also reported revenue of 1.1bn ringgit ($235mn) for the quarter and post-tax profits of 31mn ringgit ($6.63mn). EBITDA was 211mn ringgit ($45.2mn).
It said it had now reported profits for three consecutive quarters in the 2024 financial year “despite multiple operational challenges”. It said these included project and financing costs, in addition to bank challenges. On the positive side, foreign exchange fluctuations moved in the company’s favour.
“Financial constraints clipped our ability to improve business performance, particularly in terms of order book replenishment. While we work to resolve the financial limitations through a regularisation plan, there is also a critical need to bolster operational excellence, to preserve project margins and drive consistent results,” said Datuk Anuar.
Sapura Energy is now bidding on “major projects in Africa, the Mediterranean, the Atlantic, and the Asia Pacific regions. Trusted partnerships with clients and peers have helped us navigate challenges related to limited liquidity, enabling us to win more work,” he said.
More than 70% of Sapura Energy’s contracts are outside Malaysia. It recently opened an office in Woking, in the UK, to oversee projects in West Africa and the Mediterranean.