DATUK Seri Bung Moktar Radin (Lamag-BN) has voiced concern over the RM900 million raised by Sabah-owned oil and gas firm, SMJ Energy Sdn Bhd, through its recent issuance of Islamic medium-term bonds amid global economic uncertainties.
The Sabah Umno chief said various economic experts predicted the firm formerly known as SMJ Sdn Bhd could end up like the 1Malaysia Development Bhd (1MDB) scandal and the state could run into debt without a full-proof business plan.
“Recently, SMJ Energy Sdn Bhd launched its Sukuk bonds and raised RM900 million and the state government acted as its guarantor and created its own debts from this.
“My question is how effectively will the company manage these risks as it involves multi-currencies, including foreign denominations. This is my concern as foreign currency fluctuation is affected by global conditions.
“For instance, the Russia-Ukraine or the Israel-Palestine wars which will affect foreign currencies. So is SMJ Energy and the state government truly prepared (for this)?
“The government should have SMJ Energy Sdn Bhd share its business plan and investments with the state legislative assembly,” said Bung in his Sabah 2024 Budget debate in Kota Kinabalu, today.
Sabah’s oil and gas firm SMJ Sdn Bhd issued its maiden Islamic medium-term notes of up to RM900 million in nominal value based on the shariah principal Sukuk Wakalah on October 20.
SMJ Sdn Bhd currently holds 50% of participating interest in Samarang Production Sharing Contract with Petronas Carigali Sdn Bhd as the operator and also holds up 20% back-in-option in Block SB409 PSC, 25% equity in the integrated ammonia and urea production complex in Sipitang Oil and Gas Industrial Park.
The company plans to acquire Sabah International Petroleum Sdn Bhd, which holds 10% ownership in Petronas LNG9 Sdn Bhd Petronas LNG9 operates a plant within the Bintulu LNG Complex.
SMJ is expected to use the proceeds from the Sukuk issuance to refinance part of Sabah International Petroleum loans.
Sabah International Petroleum was formerly known as M3nergy, the firm that was delisted in 2010 before Sabah Development Bank Bhd took over the loss-making firm to recover its loan liabilities. – The Vibes, November 27, 2023.
