KNM defaults on loan

PETALING JAYA: KNM Group Bhd has defaulted on a principal repayment of US$3.4mil (RM15.04mil) and and interest of US$16,104 (RM71,227) to the Bank of China (Malaysia) Bhd.

Cash-strapped KNM, which had announced a default on three credit facilities totalling RM417.6mil earlier this month, said the latest default occurred on Dec 26 via its wholly-owned subsidiary, KNM Capital Labuan Ltd.

In a filing with Bursa Malaysia yesterday, KNM said it had agreed to use part of the proceeds from the proposed disposal of Borsig GmbH to pay the instalments of the credit facilities totalling US$8mil (RM35.38mil).

“However, the longstop date agreed in the share sale and purchase agreement regarding the proposed disposal had been extended various times and the last extension in principle was until Nov 30, 2022.

“On Dec 1, 2022, KNM Group announced that the proposed disposal had not materialised as the relevant conditions precedent have not been fulfilled as of Nov 30, 2022.”

Consequently, the repayment plan to settle the Loan did not materialise, it said.

Separately, as per its previous announcement on Dec 16, KNM said it had obtained a restraining order from the court to restrain its creditors from taking actions against the group for a period of three months.

The company said this will allow KNM and Bank of China to negotiate and finalise the terms of the scheme of arrangement.