KUALA LUMPUR, May 21 — The Minister of Finance (Incorporated) MoF Inc may provide financial assistance to ailing oil-and-gas giant Sapura Energy Bhd, according to sources.
Sources familiar with developments at the wholly-owned Finance Ministry unit told The Edge that the intervention would be made under MoF (Inc) Act, which empowered the finance minister to enter into business transactions for social and strategic purposes.
"From what I know it is MoF Inc that will step up (lend a helping hand to Sapura Energy. What is discussed at present is some sort of assistance package...it could be a grant of some sort and it could be announced soon," one source was quoted as saying in the latest edition of The Edge.
It also said Finance Minister Tengku Datuk Seri Zafrul Aziz has been working on the proposal for several weeks.
However, the report said details on which government entity would spearhead the assistance were not yet available.
Among the 70 companies in the MOF Inc's stable are Urusharta Jamaah Sdn Bhd, which took over pilgrim fund Lembaga Tabung Haji's assets; 1Malaysia Development Bhd; SRC International Sdn Bhd; development financial institutions Bank Pembangunan Malaysia Bhd, Bank Pertanian Malaysia Bhd and Small Medium Enterprise Development Bank Malaysia Bhd; rail transport operator Keretapi Tanah Melayu Bhd; UDA Holdings Bhd; sovereign wealth fund Khazanah Nasional Bhd; and national oil company Petroliam Nasional Bhd (Petronas).
Once a star of O&G sector and worth over RM30 billion, Sapura Energy has seen its value plunge to just RM500 million currently.
The firm was one of two including Serba Dinamik Bhd that have come to epitomise the reversal of fortunes among Malaysia’s previously high-flying firms.
Such was the interest in the matter that Sapura Energy was one of three main topics over which former prime minister Datuk Seri Najib Razak and Opposition Leader Datuk Seri Anwar Ibrahim debated in a rare public contest earlier this month.
In the debate, Najib said it was imperative that Sapura Energy be rescued in the interest of the larger Malaysian economy, and proposed that state oil firm Petronas take over the service provider to safeguard local jobs.
According to The Edge Weekly, Petronas has denied that it will take over Sapura Energy despite preliminary talks on the matter.
One industry watcher also told the business weekly that such a transaction would be highly unusual.
"So, a client taking over a contractor? Doesn’t look good, does it?" the person was quoted saying.
For its financial year ended January 31, 2022, Sapura Energy reported a net loss of RM8.89 billion from RM4.13 billion in revenue.
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 also had accumulated losses of RM13.52 billion.