PETALING JAYA: Oil and gas services provider KNM Group Bhd plans to dispose of its indirect wholly owned subsidiary FBM Hudson Italiana SpA for €22 million cash (RM110 million) to Dubai-based Petro MAT FZCO.
The move comes as a surprise as KNM had previously announced a deal to dispose its interest in the oil and gas equipment maker unit to British Midland FZE for €12 million (RM60 million).
KNM’s sub-subsidiary KNM Europa BV holds a 100% equity interest in FBM Hudson, which makes heat exchangers and high-pressure equipment, and operates a manufacturing facility in Jebel Ali Free Zone in Dubai, United Arab Emirates.
The higher price tag of €22 million was achieved upon further negotiation on a “willing-buyer willing-seller basis”, it said.
KNM, a Practice Note 17 (PN17) company, said it has decided to exit the loss-making segment in view of the continued loss-making operations of KNM Europa BV and uncertainty in business prospects.
“The expected proceeds to be received from the proposed disposal of FBM Hudson, albeit in tranches, can be reallocated to other viable businesses and for the working requirements within the group,” the group said in a filing with Bursa Malaysia today.
KNM also said the expected loss arising from the proposed disposal is about RM95 million.
The proposed disposal is subject to the approval of the company’s shareholders at an extraordinary general meeting to be convened.
“The board expects the proposed disposal to be completed on Oct 31, 2023, or at such other date as the seller and purchaser mutually agree on,” KNM said.
KNM has appointed M&A Securities Sdn Bhd to be its adviser for the disposal.
