IN his social media postings on Sapura Energy Bhd, former Prime Minister and Finance Minister Datuk Seri Najib Razak has made a few seemingly deft observation, among which are:
- The integrated oil & gas (O&G) outfit announced a net loss of as much as RM8.9 bil in its financial year ended Jan 31, 2022 – the biggest loss for any government-linked company (GLC) in Malaysia’s history. At this point, Sapura is facing dozens of bankruptcy claims filed by its vendors;
- Sapura Energy’s stock price has fallen from around 80 sen prior to the 14th General Election (GE14) to 3.5 sen.
- This also means the additional fund injection of RM2.7 bil by Permodalan Nasional Bhd (PNB) into the company in 2019 while the stock price was 41 sen has fallen 95% in a span of three years alone.
“Overall, ASB (Amanah Saham Bumiputera) depositors are experiencing a loss of RM4 bil because PNB is the biggest shareholder of this company (with 39.6% stake),” lamented Najib in a recent Facebook posting.
“Amid massive short-term cash flow and liquidity crunch – and with lenders shying away from rendering financial support – Sapura Energy will surely go bankrupt.”
Against such backdrop, Najib chided PNB for taking an easy route out by claiming that its RM4 bil investment in Sapura has only a minimum impact on the fund management company by virtue of its assets under management (AUM) totalling RM300 bil.
“PNB and the Government need to think about the strategic importance of the country – the Bumiputera vendor ecosystem, high value jobs for the people as well as the economy of the country – not just as another investment.”
Based on Najib’s argument, below are the consequences if Sapura Energy goes bankrupt:
- Direct loss to 10.6 million ASB investors is as much as RM4 bil
- Indirect losses to PNB, the Employees Provident Fund (EPF) and various public mutual trusts as a result of debt amounting to RM10 bil owing to local banks, in particular Maybank which is 50% owned by PNB.
- Nearly 10,000 high-paying jobs will be lost.
- Around 4,500 vendors/suppliers will be affected, most of them being Bumiputera companies.
- Sapura Energy’s valuable assets will be sold at fire-sale prices
- Malaysia will lose its largest petroleum service company which serves the country’s most important sector.
- Malaysia will also lose a multinational because Sapura had previously implemented projects in more than 30 foreign countries.
Henceforth, Najib called on the present Government to act swiftly to prevent Sapura Energy from falling bankrupt by offering the company an easy interest or guarantee loan to solve its cash flow problem.
“This is the way the US Government saved Citibank, General Motors, AIA and Ford in 2008 and the way how the Barisan Nasional saved Proton (the first national car manufacturer),” he contended.
“And if AirAsia can be offered a government guarantee of RM500 mil, why didn’t the PN (Perikatan Nasional) Government do the same to a company owned by PNB?”
The other option is to instruct national oil corporation PETRONAS (or sovereign wealth fund Khazanah Nasional Bhd) to take ownership of Sapura Energy from PNB because PETRONAS still requires Sapura Energy’s services for its projects and also that it has a better understanding of the O&G sector.
“This is how Petronas saved MISC in 1998 … Once recovered, PETRONAS (or Khazanah) can re-sell a portion of Sapura Energy shares to the local market as how PETRONAS re-sold MISC shares to rake in profit,” added Najib. – March 22, 2022
