By RUPINDER SINGH
SAPURA Energy Berhad (SEB) has confirmed that it has accepted the terms and conditions set by the MCF Financiers for the proposed disposal of its 50% equity interest in SapuraOMV Upstream Sdn Bhd to TotalEnergies Holdings SAS.
As part of the deal, the net sale proceeds from the disposal will be directed into a segregated account held by Sapura Upstream Assets Sdn Bhd (SUA), a wholly-owned subsidiary of SEB, for the repayment of SEB’s outstanding liabilities.
These terms, known as the MCF Conditions, require that the sale proceeds be placed in a segregated account with Malayan Banking Berhad (Maybank) or Maybank Islamic Bank Berhad.
Upon release, the proceeds will be subject to a first-ranking fixed charge in favor of Maybank Investment Bank Bhd, acting as the security agent for the MCF Financiers.
The charge will remain in place until the restructuring process is finalised, with the funds designated to pay down SEB’s debt as part of its ongoing debt restructuring plan.
The Practice Note 17 company had previously filed applications with the High Court to seek validation of the disposal and the creation of the security arrangements.
On November 4, 2024, the High Court granted SEB the necessary approvals.
The court declared that the proposed disposal and the creation of the security charge would not breach SEB’s fiduciary duties or result in an undue preference for the MCF Financiers.
The court also confirmed that the proposed disposal did not require additional court leave under Section 368(4) of the Companies Act 2016.
The company affirmed that the net sale proceeds from the proposed disposal would be used solely for reducing SEB’s liabilities, even if the planned debt restructuring scheme is not approved or sanctioned by the court.
Back in April this year, SEB announced that its SUA had entered into a conditional sale and purchase agreement (SPA) to divest its 50% equity interest in SapuraOMV to TotalEnergies.
Under the terms of the agreement, SUA will receive a cash consideration of US$530.3 million (approximately RM2.53 billion) from TotalEnergies for the transaction.
In addition, TotalEnergies will relieve Sapura Energy of a US$175 million obligation related to a financing facility extended by OMV Exploration & Production GmbH (OMV E&P) to SapuraOMV, stemming from a share subscription and restructuring exercise among SEB, OMV E&P, SapuraOMV, and SUA on January 31, 2019.
The total disposal consideration, including both the cash payment of US$530.3 million and the release of the US$175 million obligation, amounts to US$705.3 million (approximately RM3.37 billion).
Sapura Energy has actively pursued the divestment of its stake in SapuraOMV as part of its broader restructuring efforts aimed at addressing its unsustainable debt levels.
The net disposal proceeds will primarily be used to settle amounts owed to SEB’s relevant scheme creditors, including its Multi-Currency Financing lenders.
The proposed divestment is expected to yield a net gain on disposal of approximately RM793 million upon completion, thereby enhancing the financial position of the Group.