Malaysia’s troubled offshore services player Sapura Energy has secured a RM1.1bn ($250m) bailout from the government to repay debts to vendors.
The company said in a Bursa Malaysia filing on Wednesday that the country’s Ministry of Finance had agreed to provide a financial injection to the company.
The investment was done via Malaysia Development Holding which subscribed to an amount of just under $250m in nominal value of redeemable convertible loan stocks, subject to certain conditions.
This investment marks another significant milestone in Sapura Energy’s financial restructuring efforts.
Malaysia Development Holding, a special purpose vehicle of the Minister of Finance, specified that the proceeds of the subscription can only be used to settle or pay liabilities owed to Malaysian service providers operating and supporting the oil and gas sector.
According to Sapura, this funding is a pivotal step in restoring the financial stability of Malaysian vendors within the oil and gas sector.
Sapura Energy supports around 2,300 Malaysian vendors 1,800 of which are small and medium firms. The company has awarded RM7.3bn ($1.65bn) in contracts to Malaysian vendors in the last five years.
In recent company news, Sapura Energy won multiple contracts worth RM3.2bn ($721m) for its drilling business at the end of February.
