A SUFFICIENT majority of creditors who attended an informal meeting by cash-strapped KNM Group Bhd has reiterated their support of the draft Scheme of Arrangement (SOA) proposed by the current management of cash-strapped KNM Group Bhd.
The loss-making oil & gas (O&G) engineering outfit had staged an informal creditors meeting yesterday (Oct 12) where all its creditors were invited to attend for the purpose of engagement and addressing any queries that they might have on the proposed SOA.
“This will be presented in a court-convened creditors meeting which will take place soon,” KNM which is presently embroiled in a boardroom tussle with a team of takeover directors led by German tycoon Andreas Heeschen pointed out in a media statement.
“The group’s court-convened meeting was postponed to a later date as ordered by the Kuala Lumpur High Court to address the concerns of the minority of creditors in value and to engage with its creditors.”
The draft SOA, among others, entails:
(1) The current KNM board has undertaken to pay the principal in full for both its secured and unsecured creditors;
(2) A 12-month moratorium for legal action against the group (eg petitioning for liquidation) but creditors reiterated this condition applies only if the current board and management remains intact after its extraordinary general meeting (EGM) on Monday (Oct 16).
Any change will result in a creditors’ petition for liquidation and asset seizure given as security, including crown jewel Borsig Group.
(3) A moratorium on all interest and penalty charges from April 1, 2023 to June 30, 2024 means that roughly RM25 mil of finance charges currently in the quarterly consolidated accounts of KNM will no longer be there.
(4) This cost savings will lead to a profitable future for KNM to uplift the group from its PN17 (Practice Not 17) status.
(5) These measures will not only impact the share price positively but it will also make the listing of Borsig Group on the Singapore Exchange (SGX) a smooth sail.
“Within one year, the current board has turned around the fate of the group and placed it on firmer footing for paring the debt of RM1.2 bil within the next nine months or June 30, 2024 primarily through listing 60% of Borsig on the SGX which shall raise nearly RM900 mil,” noted KNM.
“The other disposals under the SOA is the Thai Asset for 2.5 bil baht (RM 328 mil), Peterborough Green Energy Ltd for £27 mil (RM157 mil) and FBM Hudson Italiana SpA whereby €12 mil (RM 60 mil) cash has already been contracted in addition to the €10 mil (RM50 mil) as we have signed an SPA (sales & purchase agreement) with the buyer.”
At 9.39am, KNM was unchanged at 12 sen with 19.03 million shares traded, thus valuing the company at RM486 mil. – Oct 13, 2023
