KNM secures loans for Thai unit, Johor RAPID

  • Business
  • Monday, 10 Oct 2016

KUALA LUMPUR: KNM Group Bhd has secured US$80mil loan for its Thai unit and RM360mil to finance contracts relating to the Refinery and Petrochemical Integrated Development (RAPID) project in Pengerang, Johor.

The oil and gas services company said on Monday it has secured 2.78bil Thai baht (US$80mil) from Credit Guarantee and Investment Facility.  

KNM said the Thai bonds would be used for its business unit in Thailand, Impress Ethanol Co Ltd for the refinancing of the latter's debt financing, expansion and working capital for its bio-ethanol plants.

United Overseas Bank (Malaysia) Bhd is the principal adviser and United Overseas Bank (Thai) Public Company Ltd is the lead manager and bookrunner for the Thai bond.

Meanwhile, KNM Group's unit KNM Capital (PIC) Sdn Bhd has RM360mil financing for the  RAPID contracts. 

KNM said the financing comprised an Islamic guarantee facility based on the Shariah principle of Al-Kafalah up to RM200mil from Danajamin Nasional Bhd to guarantee a proposed capital market instrument. The remaining amount of up to RM160mil is from Affin Islamic Bank Bhd.  

Affin Hwang Investment Bank Bhd is the principal adviser and lead arranger.

KNM Group CEO Lee Swee Eng said these financing facilities were significant milestones and major catalyst for the group as they provide additional liquidity and financial flexibility for the group’s working capital needs and strategic growth plans. 

“We are extremely pleased to have the support of the CGIF, Danajamin Nasional and various financial institutions and we look forward to continuing on our growth path.

“The event also marks the first collaboration between Danajamin and CGIF further to their strategic alliance. Both parties are continuously exploring prospects and opportunities to accelerate the development of the local capital markets,” he said. 

KNM is the first company from Malaysia to obtain a credit guarantee from CGIF for its bond to be launched in Thailand which is rated AAA/Stable by TRIS Rating Co Ltd, Thailand and first Malaysian public listed company to issue Thai currency denominated bond in Thailand capital market.

This is also the first time that KNM has obtained credit guarantee from Danajamin and substantial working capital facilities from Affin Islamic Bank to support KNM’s contracts despite the challenging capital market condition. 

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