Prime Minister Ismail Sabri Yaakob’s government is facing a dilemma over the financial meltdown at Malaysian offshore energy contractor Sapura Energy, which ranks as the largest rig owner in Asia outside of China.
Sapura Energy posted one of corporate Malaysia’s worst set of results this month, declaring a net loss of US$2.1 billion (S$2.8 billion) for the financial year ended January.
That takes the group’s cumulative losses to over US$3.7 billion since 2017, with its total debts at about US$2.44 billion, or roughly RM10.3 billion (S$3.3 billion).
Sapura Energy is in dire need of fresh funds and the government’s dilemma arises from the fact that the company is 40 per cent owned by Permodalan Nasional (PNB).
PNB, which manages the savings of the country’s majority Malay community, is also the major shareholder in Maybank, Sapura Energy’s biggest financier.
The equity interest in Sapura Energy cost PNB roughly RM2.7 billion in 2019. The group’s shares were then trading at 41 sen apiece.
The shares currently trade at three sen, resulting in a loss of more than 95 per cent in the investment in just over three years.
This story is from the March 27, 2022 edition of The Straits Times.
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This story is from the March 27, 2022 edition of The Straits Times.
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