KNM plans corporate exercises to raise funds to enhance financial position, boost growth

KUALA LUMPUR: KNM Group Bhd and its subsidiaries have proposed to undertake five corporate exercises to raise funds to enhance their financial position and accelerate the group’s future growth.

In a filing with Bursa Malaysia today, the diversified multinational group said it planned to divest the equity interest and or assets in relation to the bio-ethanol plant in Thailand and energy plant in Peterborough, United Kingdom.

It will also inject a combination of cash and certain percentage of shares into a special purpose acquisition company whereby the proceeds from the proposed injection would be used to repay KNM’s group borrowings, for working capital and other purposes to be determined by the board at a later date.

The proposed injection is expected to be completed between six and nine months.

In addition, KNM is looking at a new term loan to be arranged by a German bank and carry out the proposed Initial Public Offering of BORSIG group of companies.

"The financial needs of KNM had arisen due to the prolonged consequences of COVID-19 pandemic that affected the group KNM and its traditional markets far beyond the initial assumptions in early 2020, and subsequently played a domino effect on several businesses, investments and operations at group level.

"The announced events of default, due to the non-payment of the outstanding principal sum of 2.78 billion baht (10 Thai baht=RM1.25) and coupon payment on the bonds issued by KNM in Thailand (Thai Bonds), in itself is regarded by the KNM Board as an isolated though material event, which is predominantly attributable to the negative impacts of the COVID-19 pandemic."

KNM said the proceeds from the corporate exercise will not only enable it to rectify the outstanding amount due under the Thai Bonds, but will also enable the management to focus on growing its businesses and unlock the sum-of-the-parts value of KNM Group for its shareholders.

"The enhanced financial position and better clarity on the future prospects of KNM Group will also be essential in convincing our customers and suppliers to engage in business dealings with us and would further improve employee retention.

"The board of KNM is confident that following the successful completion of the proposed corporate exercises, KNM with its know-how and expertise will be transformed into a more financially healthy and sustainable company serving a variety of growing industry segments.”

Meanwhile, KNM told the exchange that under the current circumstances, its Board is committed to meeting its lenders and shareholders’ expectations to monetarise some of its assets by means of a few but crucial decisions as aforementioned.

"The board has formed a Restructuring Committee consisting of four Board Members that convenes on a regular basis so as to assist and guide the management in an expeditious manner.

"The Restructuring Committee will also engage directly with various lenders to ensure full commitment and transparency of the proposed corporate exercises and their respective progress.”

Further details of the corporate exercises and the definite figures will be announced at an appropriate juncture pursuant to the Main Market Listing Requirements of Bursa Malaysia Securities Bhd. - Bernama