Sapura Energy borrowed RM12B to build an oil and gas empire — the debt crushed it

Sapura Energy Bhd, once a crown jewel of Malaysia's oil and gas sector, nearly collapsed under RM12.3 billion in debt. The company was created from a high-profile merger orchestrated by tycoons Shahril Shamsuddin and Mokhzani Mahathir. At its peak in December 2013, its shares traded at RM4.94, giving it a market capitalisation of billions. By 2025, the share price had fallen to RM0.03 and the company was clinging to a rescue package.

The company's debt restructuring plan, approved by creditors in February 2026 after 52 court-convened meetings involving Sapura Energy and its 22 subsidiaries, revealed the scale of the crisis. The company owed RM10.8 billion in multi-currency financing and RM1.5 billion in outstanding trade creditor payments. About 7% of unsecured debt was permanently waived. Preferred unsecured creditors were to receive full cash payments within 90 days, while other creditors received a mix of debt instruments and new shares.

The collapse had multiple causes. Sapura Energy had grown through aggressive debt-fueled mergers and acquisitions, including the 2012 merger that created the company. When oil prices softened and global demand slowed, the company's job orders dried up. The COVID-19 pandemic accelerated the decline. The company's largest shareholder, Permodalan Nasional Bhd (PNB), a state-owned fund manager, was unable to prevent the slide despite its involvement.

Negotiations were mediated by the Corporate Debt Restructuring Committee, a Malaysian government body that coordinates between distressed companies and their financiers. Approvals-in-principle from financial institutions were obtained in December 2023 and January 2025, showing the prolonged nature of the crisis. The restructuring saved the company from liquidation but left shareholders with near-total losses.