INTRODUCTION 

The Board of Directors of Sapura Energy Berhad (“SEB” or “the Company”) wishes to announce that the Second District Insolvency Court with residence in Mexico City and jurisdiction throughout the Mexican Republic (Juzgado Segundo de Distrito en Materia de Concursos Mercantiles con residencia en la Ciudad de México y jurisdicción en toda la República Mexicana) at Mexico City (“Court”) ordered that Sapura Energy Mexicana Sociedad Anónima Promotora de Inversión de Capital Variable (“SEM”), a wholly owned subsidiary of Sapura Offshore Sdn Bhd and SapuraMex Pte Ltd which are both ultimately wholly owned subsidiaries of SEB be declared bankrupt (“Bankruptcy Declaration”). 

Pursuant to the Bankruptcy Declaration, Victor Hugo de la Cruz Caballero has been appointed as the liquidator of SEM with effect from 29 February 2024.

The details are as follows:

DETAILS OF THE BANKRUPTCY DECLARATION

The notification of the Bankruptcy Declaration was made effective from 23 February 2024.

PARTICULARS OF THE BANKRUPTCY DECLARATION

SEM filed for a restructuring (concurso mercantil en fase de conciliacion) on 19 December 2022. By a judgment dated 18 April 2023 the Court declared SEM to be in commercial insolvency and the conciliation phase was initiated. The conciliation phase was for a period of 6 months and capable of being extended twice, each extension being for 3 months. The conciliation phase had been extended for the first time from 20 November to 19 February 2024.  Prior to the expiry of the first extension of the conciliation phase, SEM applied to the Court for a second extension of the conciliation phase as SEM was close to reaching the 51% of the votes of its creditors necessary to restructure the Debt. The Judge resolved that the extension petition was not properly signed by the required majority, because it resolved that certain powers of attorneys were insufficient, and automatically issued a bankruptcy declaration.

TOTAL COST OF INVESTMENT IN SEM

SEM is not a major subsidiary of the Company as defined under Chapter 1 of the Main Market Listing Requirements. The Company's total investment in SEM is USD 675.00.

APPOINTMENT OF LIQUIDATOR

Victor Hugo de la Cruz Caballero, who served as the conciliator during SEM's restructuring phase, has been appointed as the liquidator of SEM by the Special Federal Institute for Insolvency Specialists (“IFECOM”). IFECOM will oversee his work along with the Bankruptcy Court. His appointment is effective from 29 February 2024.

Following SEM's attempt to restructure its debt, the time limit for the restructuring elapsed, leading to SEM's automatic entry into bankruptcy. The decision not to extend the restructuring period is currently under challenge. If the challenge is successful, the liquidator will be replaced, and the restructuring process will begin again.

TERMS OF REFERENCE OF THE LIQUIDATOR

The liquidator is responsible for liquidating the company's assets and settling its debts with creditors. In the interim, the liquidator may also mediate the restructuring of the debt of the company. The Mexican Bankruptcy Law, known as the "Ley de Concursos Mercantiles," and the rules issued by the Judiciary through IFECOM (an institute that appoints and supervises liquidators), specify the duties of the liquidator and the fees they may charge for their services. IFECOM appoints and supervises liquidators.

FINANCIAL AND OPERATIONAL IMPACT OF THE BANKRUPTCY DECLARATION AND APPOINTMENT OF LIQUIDATOR ON SEB GROUP

There will be no immediate material financial and operational impact on SEB Group arising from the appointment of the Liquidator and the winding up of SEM. SEB does not anticipate any material and/or significant losses from the winding up of SEM.

SEM currently does not possess any assets, conduct operations, or engage in ongoing projects in Mexico.

STEPS TAKEN AND PROPOSED TO BE TAKEN BY SEB IN RESPECT OF THE BANKRUPTCY DECLARATION AND APPOINTMENT OF THE LIQUIDATOR

SEM is preparing an appeal against the Bankruptcy Declaration, citing the improper rejection by the Court of the extension request of the conciliation phase. Additionally, SEM emphasizes that a restructuring agreement had been reached and communicated to the Court before the issuance of the bankruptcy judgment. Concurrently, as SEM has already reached an agreement with the required majority of its creditors, it intends to refile the restructuring agreement to facilitate the restructuring of SEM’s debt and lift the Bankruptcy Declaration.

This announcement is dated 1 March 2024.