KUALA LUMPUR – Petroliam Nasional Bhd (Petronas) has categorically denied reports and speculations on purported “talks with the government on a proposal to take a significant stake” in Sapura Energy Bhd (SEB).
“The group has always been and will continue to be strictly guided by an established framework for any investment or divestment consideration,” it said in a statement today.
The national oil and gas company emphasised that it remains committed to working closely with oil and gas, services, and equipment players, leveraging their expertise and capability as activities increase in line with the industry’s recovery from the impact of Covid-19.
SEB is currently embroiled in financial trouble after reporting a headline loss of RM6.6 billion in the fourth quarter of 2022, mainly due to impairments amounting to a whopping RM5.4 billion.
The main cause of the disappointing performance is its legacy contracts, resulting in liquidation damages, cost overruns, unapproved claims, contract de-scoping, and additional Covid-19 costs, Public Investment Bank said in its research report.
“Liquidity concerns remain, further hampering turnaround efforts while limiting its growth prospects.
“This has also affected the execution of certain projects due to the lack of support from suppliers given the amount still owed,” it said.
The investment bank also noted that the group is in the middle of negotiating with its vendors on outstanding payments and lenders through existing or new facilities and under the scheme of arrangement.
Moving forward, it said, the group will still be in the red as profit margins will remain volatile given the difficulties in managing costs arising particularly from its legacy projects.
Liquidity concerns remain, further hampering the turnaround efforts while limiting its growth prospect.
At 11.50am, SEB’s shares rose half-a-sen to 3.5 sen with 27.15 million shares traded. – Bernama, March 25, 2022
