Malaysian oilfield services provider Sapura Energy is facing cash flow and liquidity issues exacerbated by the Covid-19 pandemic.
Responding to recent news reports, Sapura Energy on Wednesday clarified that it is still a going concern. The company’s business segments continue to execute 59 projects globally and its Exploration & Production business, operated through SapuraOMV, continues to produce gas at a rate of 34 kboe per day.
However, the company acknowledged it is currently facing short-term cash flow and liquidity issues, primarily exacerbated by the unprecedented Covid-19 pandemic. The company is taking actions to resolve these liquidity issues, including expediting claims and commercial settlements with clients; discussing with vendors, and negotiating with lenders for support through existing working capital facilities.
With long-term sustainability in mind, the previously announced board restructuring task force is drawing up a reset plan that aims to strengthen the balance sheet, improve the financial framework, streamline the operating model, and chart future business direction.
The task force comprises Group CEO Datuk Anuar Taib and five directors from Sapura Energy’s board. PriceWaterhouseCoopers and Rothschild & Co have been appointed as independent financial advisers and the development of the reset plan is progressing well, Sapura said.
“We have engaged with key stakeholders and they have been supportive,” Datuk Anuar stated.
When it comes to its recent financial results, Sapura in late September 2021 announced its results for the second quarter of the financial year 2022, posting group revenue of RM 747 million (about $176.5 million) and Loss-AfterTaxation and Minority Interests of RM 1.52 billion (about $359 million).