Anwar denies Malaysia bailing out Sapura Energy with investment
By Anisah Shukry
(Bloomberg) – Prime Minister Anwar Ibrahim said he had ordered an audit of Sapura Energy and a change of management before approving a controversial 1.1 billion ringgit ($248.2 million) injection into the cash-strapped oil and gas firm.
Anwar acknowledged that the investment had become a politically sensitive issue and denied it was a bailout. He said the funds would be used solely to repay vendors of the company.
'This is not a bailout like the ones in the past,' Anwar said at the Finance Ministry's monthly assembly in Putrajaya on Thursday. 'We began with a forensic audit to identify the problem.'
Sapura Energy, a financially distressed firm with a Practice Note 17 status, announced late Tuesday that it secured up to 1.1 billion ringgit in investment from the Finance Ministry. Its shares jumped as much as 28.6% on Wednesday on the news before paring back gains. It was trading 12.5% higher on Thursday morning.
The investment drew criticism from the opposition, who noted that Economy Minister Rafizi Ramli had in 2022 shut down a suggestion from former Prime Minister Najib Razak to bail out Sapura Energy.
Anwar said it was a difficult choice for him to make given his long opposition toward government bailouts of private firms. However, he said the situation was different and that he expected Sapura Energy's new management to eventually repay the government in full.
'This is not a bailout where we save a big company and its management. The chairman, the senior management must all leave, that's our condition. They must be replaced by new management, and if there are any problems that require investigation, that will go on,' said Anwar.
State-owned investment management firm Permodalan Nasional Berhad had similarly denied the funds were a form of bailout in a statement late Wednesday. Permodalan Nasional Berhad is a significant shareholder of Sapura Energy.
It said the funding was crucial for the financial survival of Malaysian service providers within the oil and gas ecosystem, noting that Sapura Energy has more than 2,000 vendors. The firm is also a critical service provider for the Malaysian oil and gas industry, it added.
More stories like this are available on bloomberg.com
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