Kuala Lumpur, 14 May 2025

Sapura Energy Berhad (“SEB” or “the Company”) and the Company and its subsidiaries (collectively, “the Group”) today announced its proposed Regularisation Plan, aimed at facilitating the Company's exit from Practice Note 17 (“PN17”) status and returning the Group to a stronger financial and operational standing. The final plan, expected to be submitted soon, includes a proposed debt restructuring exercise to resolve about RM12.1 billion in total borrowings and trade liabilities; and a proposed capital reconstruction to set off against the Group’s accumulated losses.

“Implementation of the Proposed Regularisation Plan, together with the Group’s continued focus on its core businesses in Engineering & Construction, Drilling, and Operations & Maintenance, represents the most viable pathway to turn around the Group’s financial condition”, said SEB Group CEO Muhammad Zamri Jusoh. “We are confident the successful execution of the plan will return the Group to profitability and restore confidence among stakeholders”.

Components of the Proposed Regularisation Plan

The Proposed Regularisation Plan comprises four key components designed to restore SEB’s financial health and position the Group to uplift its PN17 status. It includes a Proposed Capital Reconstruction involving a 99.99 percent capital reduction to offset accumulated losses; and a 20-to-1 share consolidation to enhance share trading price and reduce price volatility. A comprehensive Proposed Debt Restructuring exercise will reduce SEB’s total borrowings from about RM10.8 billion to RM5.6 billion, yielding substantial interest savings and reduced financial burden, through several mechanisms that, amongst others, includes debt conversions to equity and equity-like instruments and a debt waiver.

The plan also incorporates a Proposed Fund-Raising initiative where Malaysia Development Holding Sdn. Bhd. (“MDH”) will subscribe up to RM1.1 billion in redeemable convertible loan stocks (“RCLS”), earmarked to settle outstanding payments to vendors in the Malaysian oil and gas ecosystem. MDH will become a major shareholder upon full conversion of the RCLS, which will result in MDH holding more than 33 percent of SEB’s enlarged share capital. MDH will seek an exemption from the Securities Commission Malaysia from the requirement to make a mandatory general offer to SEB’s existing shareholders. This exemption will be subject to the approval of non-interested shareholders at an Extraordinary General Meeting (“EGM”), to be convened at a later date.

More details of the plan are available in SEB’s Requisite Announcement posted on Bursa Malaysia.

Implementation and Results of SEB’s Reset Plan

The Proposed Regularisation Plan marks the culmination of a turnaround strategy, initiated after SEB’s classification as a PN17 issuer in 2022. Under the guidance of its Board Restructuring Task Force, the Group implemented a Reset Plan focusing on three strategic pillars:

• strengthening its balance sheet by reducing unsustainable debt and resolving aged payables;
• enhancing operational efficiency through disciplined project execution, improved risk management, and a refocus on core capabilities; and
• driving future growth by positioning its businesses as solution providers, which includes supporting the global energy transition.

Strengthening balance sheet

A core component of the Reset Plan is the Group’s effort to reduce unsustainable debt and resolve aged payables through Schemes of Arrangement (“the Scheme”). In March 2022, SEB obtained Court Orders to allow the Company and its 22 subsidiaries to initiate the development of the Schemes. A Proof of Debt exercise followed to verify and admit claims from creditors under the Scheme.

Concurrently, the Group worked with the financiers of its Multi-Currency Financing Facility (“MCF Financiers”), through mediation by the Corporate Debt Restructuring Committee (“CDRC”), to develop an acceptable solution through a proposed debt restructuring scheme.

The Scheme, as approved by relevant scheme creditors in February 2025 and sanctioned by the Court in March 2025, provides a structured debt resolution framework, enabling the Group to present the Proposed Regularisation Plan for shareholders’ approval.

Enhancing operational efficiency

Under the Reset Plan, the Group also implemented a multi-pronged strategy to stabilise its global business operations, which was severely impacted by the COVID-19 pandemic.

A major thrust of this strategy has been the Group’s focus on improving bidding and project delivery capabilities. By shifting its attention toward margin preservation, the Group enhanced its earnings performance, while strengthening financial discipline and improving cost visibility helped maintain a healthy cash flow. SEB’s commitment to bolstering enterprise risk management is reflected in the transformation of its Group order book over recent years. SEB made a strategic shift in business development, by focusing on lower-risk, day-rate or reimbursable contracts—such as those for drilling services, operations and maintenance, and transportation and installation—while selectively pursuing lump-sum engineering, procurement, construction, and installation ("EPCI") projects, which tend to carry higher risk.

As a result, SEB has sustained annual revenue above RM4 billion since the launch of the Reset Plan in 2022, despite ongoing challenges in securing working capital and bank guarantees. This resilience is underscored by a marked improvement in operational performance, with Group Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”) rising to RM524.3 million in Financial Year 2025 (“FY2025”), compared to a Group Loss Before Interest, Taxes, Depreciation, and Amortization (“LBITDA”) of approximately RM2.3 billion in Financial Year 2022 (“FY2022”). The Group’s cash and cash equivalents at the end of the financial year also progressively improved from RM442.2 million in FY2022 to RM2.1 billion in FY2025.

Driving future growth

Looking ahead, SEB remains focused on repositioning itself for long-term sustainability and profitability. In FY2025, the Group recorded a profit after tax and minority interest of RM190 million, reversing a RM509 million loss in FY2024. Revenue rose 8.9 percent year-on-year to RM4.7 billion, while the Group’s order book now stands at RM8.2 billion.

The Group is realigning its Engineering & Construction (“E&C”) segment to meet evolving industry demands, including optimising the deployment of key assets such as Sapura 3500 and Sapura 1200 to regions with higher market activity. Brazil remains a key region of operation, with all six of its jointly owned pipelay support vessels operating under long term contracts. Through its joint venture, Kitar Solutions, the Group also plans to grow its presence in decommissioning services, leveraging established expertise and client networks.

In parallel, SEB is strengthening its position in the Drilling segment by expanding its global footprint, targeting key markets across Southeast Asia, Africa, and the Americas.

The Group will also continue to grow its Operations & Maintenance (“O&M”) segment beyond its traditional market in Malaysia, by actively pursuing regional projects to build a resilient and robust order book.

“With these strategic initiatives and the successful implementation of the Proposed 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.”

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Glossary of Terms

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.