KNM is seeking a resolution for the settlement of monies due to its respective lenders from the monetisation of its non-core assets and listing of its German machinery and equipment company Borsig.
PETALING JAYA: KNM Group Bhd said its initiatives to reduce its debt of RM1.1 billion is on track and that its major creditors are supportive of its restructuring exercises to get back on its feet.
In a statement today, the oil and gas services provider said it had received a support letter from an unnamed major creditor on its initial public offering (IPO) track for its prized asset, German machinery and equipment company Borsig.
It hopes to raise RM950 million from the IPO proceeds to pare down its existing debt.
KNM said the letter stated “any change to KNM’s current leadership or board will be seriously disruptive and would cause undue delays which will not be in the interests of the shareholders or creditors”.
In a bourse filing yesterday, KNM said the Asian Development Bank’s trust fund Credit Guarantee and Investment Facility, TransAsia Private Capital Ltd and Danos Ltd, and majority of the lenders (including Bank of China (M) Bhd) are working closely with the board and its CEO and managing director Ravindrasingham Balasingham.
It said the group is seeking to achieve a mutually acceptable resolution of the settlement of monies due to its respective lenders from the monetisation of its non-core assets and IPO/sale of Borsig.
Its other non-core assets include its cassava-to-ethanol plant Impress Ethanol Co, Ltd in Bangkok, Thailand and its planned energy-from-waste facility in Peterborough, UK, under Peterborough Green Energy Ltd. It has 54 acres of land and all the licenses necessary right up to grid connection.
KNM said under the proposed IPO for Borsig on the Singapore Stock Exchange (SGX), shareholders will retain a 40% stake in the listed Borsig and would raise €190 million (RM950 million) in cash to pare down a large portion of the RM1.1 billion debt.
“As soon as we pare down the debt, it will reduce our burdensome quarterly interest and penalty charges of RM25 million,” it said.
On Sept 4, German tycoon Andreas Heeschen, and eight other shareholders requisitioned for an extraordinary general meeting (EGM) to remove the current board led by chairman Tunku Yaacob Khyra, the largest shareholder with a 9.44% stake.
They are putting up a slate of new directors to be appointed including Heeschen and Johor princess Tunku Kamariah Aminah Maimunah Iskandariah Sultan Iskandar who is to replace Tunku Yaacob, a member of the Negeri Sembilan royal family.
On Sept 19, former KNM executive director Flavio Porro, who is also a member of the group seeking to oust the board, alleged Ravindrasingham had issued misleading statements, and the board had launched a media campaign against his team.
The board has agreed to convene an EGM on Oct 16 to vote on the resolutions to remove the directors and appoint new ones.
KNM’s shares closed 1 sen or 7.14% higher at 15 sen, valuing the group at RM583.54 million.
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