Date: 7.06.2023.

Kuala Lumpur, 7 June 2023

Sapura Energy Berhad (“Sapura Energy” or “the Company”) wishes to announce that on 6th June 2023 the High Court of Malaya (“the Court”) granted Sapura Energy and 22 of its wholly owned subsidiaries (collectively, “the Applicants”) an extension period of nine months for the Convening and Restraining Orders (“the Orders”) granted in their favour, from 11 June 2023 to 10 March 2024. The Orders, which had initially been granted by the Court on 8 March 2023 pursuant to Sections 366 and 368 of the Companies Act, were set to expire on 11 June 2023.

The Orders will enable each of the Applicant to summon meetings with its creditors, to consider and approve a proposed scheme of arrangement and compromise (collectively, “the proposed Schemes”) as part of the Company’s group-wide debt restructuring plan. The Restraining Orders will continue to assist the Applicants in engaging with creditors without being disrupted by the threat of litigation that could impact the Applicants’ operations.

The extension is necessary for the Applicants to finalise the proposed Schemes with its financiers and other creditors, following significant progress in negotiations to resolve the Applicants’ unsustainable debt and overdue payables. Once the proposed Schemes are in place, the Applicants will work towards their next milestone, namely the court-convened meetings which are envisaged to be held by the end of October 2023, barring any unforeseen circumstances.

“Whilst we acknowledge the lengthy negotiation process due to the sheer complexity and size of the restructuring, we are quite confident that we are now approaching the last few milestones of this journey,” said Sapura Energy Group CEO Datuk Mohd Anuar Taib.

“Our commitment remains – we are determined to protect the value of all our stakeholders in the oil and gas ecosystem,” he added.

The primary creditors for Sapura Energy Group are the financiers for its Multi-Currency Financing Facilities (“MCF Facilities”). To reduce its unsustainable debt, Sapura Energy and the other Applicants, who are obligors under the MCF Facilities, have engaged with the primary creditors with the help of the Corporate Debt Restructuring Committee (“CDRC”) to mediate the complex negotiations.

Pursuant to such complex negotiations, Sapura Energy and the Applicants are in the process of further refining the proposed restructuring schemes, with a view to reaching agreement in principle with the financiers on certain key items. This includes reaching an accord on the amount of the Sapura Energy’s potential sustainable debt going forward, paring down the outstanding liabilities through the potential divestment of Sapura Energy’s stake in its associate company, SapuraOMV Upstream Sdn. Bhd., and options such as the issuance of debt-to-equity financial
instruments as one of the methods for resolution.

The proposed restructuring schemes will include a potential financial investment from a white knight of approximately RM1.8 billion, which would further the Group’s goal to preserve the industry eco-system.

Separately, the CDRC had in February 2023 extended the standstill period under the CDRC regime for Sapura Energy and its relevant subsidiaries to come to a landing with the MCF Financiers for an agreeable debt restructuring solution, up to 9 September 2023.

Meanwhile, Sapura Energy has validated about RM1.5 billion in claims from about 2,000 vendors through its Proof of Debt exercise involving trade creditors. The adjudication phase is almost complete, with only eight claims still being processed.

To address the Company’s PN17 status, Sapura Energy has appointed MIDF Amanah Investment Bank (“MIDF Amanah”) as principal adviser to help formulate a regularisation plan to be submitted to Bursa Malaysia. MIDF Amanah, on behalf of Sapura Energy, has sought Bursa Malaysia’s approval for an extension of time to submit the proposed regularisation plan.

Despite limited working capital and macroeconomic challenges, the Group’s financial performance showed a marked improvement, recovering from an operating loss of RM2.2 billion in the previous financial year to an operating profit of RM751 million in financial year 2023.

Building on the positive momentum achieved last year, the Company is determined to extend the turnaround and continue exploring opportunities in areas in which Sapura Energy is most competitive in the Eastern and Western Hemispheres.

"Despite our financial setbacks, Sapura Energy has managed to maintain its capabilities, significantly enhancing the company's prospects. This turnaround will have positive impact not only on the Company, but also our vendors, clients, lenders, and the entire value chain within which we operate," commented Datuk Anuar.

Cautionary note: “Sapura Energy”, “the group” and “the company” are used for convenience where references are made to Sapura Energy Berhad in general. Similarly, words like “we”, “us” and “our” are used to refer to Sapura Energy Berhad in general or to those who work for the company and its subsidiaries, where relevant. This press release may contain forward-looking statements. All statements other than statements of historical facts included in this press release, including, without limitation, those regarding our financial position, financial estimates, business strategies, prospects, plans and objectives for future operations, are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding our present and future business strategies and the environment in which we will operate in the future. Such forward-looking statements reflect our current view with respect to future events and are not a guarantee of future performance. Forward-looking statements can be identified by the use of forward-looking terminology such as the words “may”, “will”, “would”, “could”, “believe”, “expect”, “anticipate”, “intend”, “estimate”, “aim”, “plan”, “forecast” or similar expressions and include all statements that are not historical facts.