'No bailout here': Fahmi defends govt's RM1.1b Sapura Energy investment

Summary

• Communications Minister Fahmi Fadzil dismisses accusations that the government is bailing out Sapura Energy.

• The minister insists the RM1.1 billion provided by the Finance Ministry’s special purpose vehicle is a “strategic investment”.

• Fahmi adds that the investment was conditional and not “free money”.

Communications Minister Fahmi Fadzil has defended the government’s RM1.1 billion cash injection into debt-ridden Sapura Energy Bhd.

Denying claims of the move being a bailout by Putrajaya, Fahmi insisted the “strategic investment” differs from bailouts offered by previous administrations, particularly during former prime minister Dr Mahathir Mohamad’s era.

“It’s not a bailout like the ones that happened during (Mahathir’s) era. That was a real bailout (and) this is not,” Fahmi told a post-cabinet press conference in Putrajaya today. 

“This is Madani, not Mahathir,” he quipped. 

In a Bursa filing yesterday, Sapura Energy announced it had received an RM1.1 billion investment from Malaysia Development Holding Sdn Bhd (MDH) - a special purpose vehicle under the Minister of Finance (Incorporated). 

The investment is to be exclusively used to pay off the oil and gas company’s debts to its 2,000 vendors.

‘Money came with strings attached’

Commenting further, Fahmi said the government does not view the investment in the form of redeemable convertible shares as a bailout as it was made with specific conditions.

“Among the conditions is for this fund to be used to pay off arrears and money owed by Sapura Energy to over 2,000 vendors, 80 percent of whom are bumiputera.

“The government, as a general rule, will look into it case by case, but we will practise the principle of ‘there is no free lunch’. This is not free money,” he added.

Among the considerations given include Sapura Energy’s internal changes and the government's hope for the company to be in a more sustainable position, he said.

Earlier, Bachok MP Syahir Sulaiman had questioned the rationale and merit behind the allocation to a company struggling with financial losses and competitiveness.

Syahir also questioned whether the bailout was a collective cabinet decision, particularly directing his concerns at DAP ministers - since the party’s chairperson Lim Guan Eng and his father Kit Siang historically opposed bailouts - as well as PKR leaders including Rafizi Ramli who had opposed the move in 2022.

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