KNM Group Bhd’s shareholders have approved the €270 million (RM1.3 billion) sale of its German subsidiary Deutsche KNM GmbH (DKNM), paving the way for the company to settle its huge debt and engineer a turnaround.
Shareholders’ approval for the disposal of DKNM, which owns the group’s crown jewel Borsig GmbH, was the final condition precedent holding up the deal struck with Japan’s NGK Insulators Ltd.
An overwhelming majority – 93.74% – of shareholders present at KNM’s extraordinary general meeting yesterday voted to approve the sale, according to KNM.
The EGM was held a day after the Practice Note 17 (PN17) status company was delisted from Bursa Malaysia on Nov 5.
“Successfully closing the disposal of DKNM to NGK Insulators is a big step towards the turnaround of KNM, and the overwhelming support from shareholders today – as the last outstanding condition precedent – is key to sealing this deal,” said KNM chairman Tunku Yaacob Khyra in a statement.
The deal’s completion is expected to strengthen the oil and gas services provider’s balance sheet by cutting its debt of about RM1 billion and providing RM100 million in working capital to revitalise its Malaysian operations.
KNM CEO Ravindrasingham Balasingham said the shareholders’ approval marks “an important step in restoring KNM’s financial health and setting the stage for sustainable growth”.
“We are grateful to our shareholders for their confidence and to all stakeholders who have stood by KNM throughout this journey,” he said in a statement.
Bursa had filed a suit to block an EGM on Oct 30 called by MAA Group Bhd to approve the proposed sale DKNM.
Bursa had filed an originating summons against MAA, CIMSEC Nominees (Tempatan) Sdn Bhd, KNM and its subsidiary KNM Process Systems Sdn Bhd to prevent the convening of the EGM until Bursa’s Main Market Listing Requirements have been met.
The bourse regulator said the court action, despite KNM’s planned delisting, aimed to “protect market integrity”.
MAA, which is led by Tunku Yaacob, is a major shareholder of KNM with an 18.43% stake. A member of the Negeri Sembilan royal family, Tunku Yaacob holds another 0.94% stake via Melewar Industrial Group Bhd.
On Oct 30, KNM shareholders agreed to adjourn the EGM to Nov 6, a day after the group’s delisting.
The sale of DKNM was part of KNM’s regularisation plan submitted to the regulator in August. However, Bursa rejected the plan on Oct 3, leading to KNM appealing the decision.
On Oct 27, KNM’s appeal against the regulator’s rejection was withdrawn as the group opted for a delisting to push through the DKNM sale.
