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Sapura Energy shielded by South Africa's high court to pursue debt restructuring scheme

KUALA LUMPUR: Sapura Energy Bhd and its subsidiary Sapura 1200 Ltd have been given legal protection by the South African High Court over its scheme of arrangement.

The order was given by the Western Cape Division of the High Court in a notice dated Oct 25.

In its notice, the high court recognised specific protections provided to Sapura Energy in Malaysia earlier this year, as the company pursues a debt restructuring plan under the latter's Companies Act of 2016.

Key elements of the ruling include a moratorium on all claims against Sapura Energy and its assets in South Africa, including vessels operated by the company

"The provisions of the Malaysian court orders, and in particular the moratorium and related provisions made in accordance with section 368 of the Malaysian Companies Act, 2016 shall apply and be of full force and effect in the Republic of South Africa in regard to the Malaysian scheme companies.

"Any assets of the Malaysian Scheme companies situated in the Republic of South Africa and/or in its territorial waters at any time as long as the Malaysian court orders remain in place," it said.

According to the notice, interested parties including creditor can challenge the order, but they must give at least 48 hours (or by Nov 1) notice if they believe the order should be overturned.

Additionally, Sapura Enerygy must notify South African court registrars and major law firms if the Malaysian orders change or expire, which would lift the protection in South Africa.

"For transparency, Sapura Energy is also required to publish the court order in mainstream newspapers including The Business Day, The New Straits Times and Berita Harian to ensure that all potentially affected parties are aware of the legal proceedings," it added.

Previously, the Kuala Lumpur High Court granted Sapura Energy a nine-month extension to the convening and restraining orders that the group obtained from the court in March 2024, to allow it to continue to work out a debt restructuring scheme with its creditors.

The convening and restraining orders granted to the group in March 2024 expired on June 10.

This is the third set of convening and restraining orders that the group obtained from the court since March 2022.

The latest orders, which will be in effect from June 11 this year till March 10, 2025, effectively shields Sapura Energy and its subsidiaries from action by creditors so that they can continue to meet and discuss with them to get approval for a proposed scheme of arrangement and compromise without being disrupted by the threat of litigation.

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