THE government has firmly rejected claims that the RM1.1 billion financial support to Sapura Energy was a "bailout" for the company, describing it instead as a strategic investment.
Communications Minister Datuk Fahmi Fadzil clarified that Malaysia Development Holding Sdn Bhd (MDH), a special purpose vehicle under the Ministry of Finance, was making the investment through a subscription of redeemable convertible loan stocks in Sapura Energy.
"This is not a bailout. The RM1.1 billion investment is a strategic decision, which comes with specific conditions," Fahmi said during a press conference today.
"Sapura Energy is required to use the funds solely for the settlement of liabilities owed to more than 2,000 local vendors, 80 percent of which are Bumiputera enterprises."
Fahmi explained the matter was discussed in depth at a Cabinet meeting chaired by Prime Minister Datuk Seri Anwar Ibrahim earlier today.
The Minister said the investment was a carefully considered move to support the local oil and gas ecosystem, particularly the vendors who rely on Sapura Energy’s operations.
"Sapura Energy will be issuing a statement later today to further clarify the matter," Fahmi added.
When asked about the Madani government’s overall stance on bailouts, Fahmi reiterated that each case would be considered on its own merits.
However, he said under the principles of the Madani government, "there are no free lunches," signalling that any financial support would come with clear conditions and accountability.
In a filing to Bursa Malaysia on Tuesday, Sapura Energy confirmed the subscription of RM1.1 billion worth of redeemable convertible loan stocks by MDH, subject to certain conditions.
The company expressed its gratitude to the government for the funding, acknowledging its significance in stabilizing the financial position of local vendors within the oil and gas sector.
The move is seen as part of the government’s broader efforts to strengthen the local business ecosystem, particularly in strategic industries such as oil and gas, while ensuring that the funds are used to support the settlement of existing liabilities and promote sustainable growth. – March 12, 2025
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