PETALING JAYA: Sapura Energy Bhd (SEB) today announced its regularisation plan aimed at facilitating the group’s exit from Practice Note 17 (PN17) status and putting it back on a stronger financial and operational standing.
The final plan, expected to be submitted to Bursa Malaysia later this month, includes a debt restructuring exercise to resolve about RM12.1 billion in total borrowings and trade liabilities and a capital reconstruction to set off against the group’s accumulated losses.
Group CEO Muhammad Zamri Jusoh said implementation of the regularisation plan, together with the continued focus on its core businesses in engineering and construction, drilling, and operations and maintenance, represents the most viable pathway to turn around the group’s financial condition.
“We are confident the successful execution of the plan will return the group to profitability and restore confidence among stakeholders,“ he said in a statement filed with Bursa Malaysia yesterday.
In financial years 2022, 2023 and 2024, the external auditors highlighted a material uncertainty related to going concern in the financial statements of both the group and the company.
The uncertainty was tied to several key factors, including the need to extend restraining orders, secure favourable outcomes in legal claims related to terminated engineering and construction projects, and successfully implement the proposed schemes of arrangement with at least 75% approval from relevant scheme creditors during court-convened meetings.
Over the years, SEB has managed to achieve these critical milestones, allowing the group to move forward with finalising its regularisation plan.
In the filing with Bursa Malaysia, the SEB board stated its confidence in the group’s forward path, noting that the successful delivery of key restructuring actions provides a strong foundation for completing the plan.
The FY25 audited financial statements will be included in SEB’s annual report, expected to be published by May 31.
SEB said the regularisation plan represents the culmination of the group’s turnaround strategy, which began following its classification as a PN17 issuer in 2022.
With help from its board restructuring task force, the group put into action a reset plan based on three main goals – improve its financial health by cutting down on unmanageable debt and paying off old bills; boost efficiency by carefully managing projects, improving risk management and focusing on what it does best; and promote future growth by changing its businesses to offer solutions, including support for global energy transition.
Under the reset plan, SEB implemented a multipronged strategy to stabilise its global operations, which were severely affected by the Covid-19 pandemic.
A key focus was on strengthening bidding and project delivery capabilities, prioritising margin preservation and enhancing financial discipline to support healthy cash flow.
The group improved enterprise risk management by changing its business development strategy to focus on safer, day-rate, or reimbursable contracts – such as drilling services, operations and maintenance, and transport and installation – while carefully choosing to take on some higher-risk lump-sum engineering, procurement, construction and installation projects.
These measures have enabled SEB to sustain annual revenue above RM4 billion since 2022, despite ongoing challenges in securing working capital and bank guarantees.
“With these strategic initiatives and the successful implementation of the regularisation plan, SEB is confident in its path to operational recovery, improved financial health and eventual upliftment from PN17 status,” said Muhammad Zamri.
“We are hopeful that this plan will not only enable SEB’s recovery but also catalyse the growth of the country’s energy ecosystem,” he added.
