Troubled offshore services provider Sapura Energy has secured a RM1.1 billion ($250 million) bailout from the government to repay debts owed to vendors.

In a filing with Bursa Malaysia on Wednesday, the company confirmed that the Ministry of Finance had agreed to provide a financial injection through Malaysia Development Holding.

The investment was made via a subscription to redeemable convertible loan stocks with a nominal value of nearly $250 million, subject to certain conditions. This marks another significant milestone in Sapura Energy’s ongoing financial restructuring efforts.

Malaysia Development Holding, a special-purpose vehicle (SPV) under the Minister of Finance, specified that the funds from this subscription can only be used to settle liabilities owed to Malaysian service providers supporting the oil and gas sector.

According to Sapura Energy, this funding is a crucial step toward restoring the financial stability of Malaysian vendors in the industry.

Currently, Sapura Energy supports around 2,300 Malaysian vendors, including 1,800 small and medium enterprises (SMEs). Over the past five years, the company has awarded RM7.3 billion ($1.65 billion) in contracts to local vendors.

In other company news, Sapura Energy secured multiple drilling contracts worth RM3.2 billion ($721 million) at the end of February.