PETALING JAYA: It is crunch time for financially-distressed KNM Group Bhd
.
This Thursday, the oil and gas process equipment maker will meet its creditors to adopt the scheme of arrangement (SoA).
Four days later, on Oct 16, KNM will face a group of dissenting shareholders seeking to remove its current nine-member board led by chairman Tunku Datuk Yaacob Khyra, who holds a 9.5% indirect stake in the company via Melewar Industrial Group Bhd.
According to Tunku Yaacob, the company is confident it will see positive outcomes for the two crucial meetings as its main creditors have agreed to the scheme of payment while the emergence of Sarawak tycoon Datuk Seri Mahmud Abu Bekir Taib as its substantial shareholder is seen to be supportive of Tunku Yaacob and the current board members.
“An agreement has been reached, in principle, with KNM’s largest creditors, on the scheme of payments to creditors.
“These two largest creditors, the Asian Development Bank’s Credit Guarantee and Investment Facility and Danos Ltd, which account for 72% of our total debts to creditors amounting to RM1.2bil, are in support of the SoA to be tabled on Oct 12.
“For the scheme to be successful, 75% of attending creditors must vote in favour of the arrangement,” Tunku Yaacob explained.
Getting the green light for the scheme is crucial to ensure the survival of KNM. The scheme involves the sale of KNM’s non-core assets overseas, the listing of Borsig on Singapore Exchange, repayment of all creditor debts and the moratorium on all interest charges for 15 months starting from April 1, 2023.
Tunku Yaacob is also unperturbed over the requisition by new substantial shareholder German billionaire Andreas Heeschen and a group of KNM shareholders to remove him and the other current board members.
“We are confident of retaining our positions in KNM. The other side (Heeschen) has about 15% (together with other KNM shareholders). With our friendly parties, we have more than 30%,” Tunku Yaacob told StarBiz after a briefing for investors yesterday.
Mahmud, who is the son of Sarawak Governor and former chief minister Tun Abdul Taib Mahmud, said in a statement to StarBiz: “I have the fullest confidence in the current board of directors under the strong leadership of Tunku Yaacob Khyra. They have formulated a very sound plan for KNM.”
Mahmud emerged as a substantial shareholder of KNM after acquiring 203.5 million shares or a 5.03% stake in the company in the open market on Oct 6.
It is believed that Heeschen has started paring his stakes in KNM yesterday, causing the counter to close 14.7% lower at 14 sen on active trade.
Meanwhile, MAA Group Bhd, which holds an 8.55% stake in KNM, intends to vote in favour of retaining the current KNM directors, and is against the appointments of new candidates in KNM’s EGM to be held on Oct 16. MAA is a flagship company of Tunku Yaacob.
“MAA will vote to maintain the existing board of directors of KNM, and will vote against the appointments of the proposed candidates,” MAA said in a statement yesterday.
It will also retain Ravindrasingham Balasingham, better known as Ravi, as KNM’s executive director (ED) and group chief executive officer.
“As shareholders of KNM, we strongly believe that the current team at KNM should remain unchanged. We are confident that the current management and board will be able to turn the company around through its strong relationship with creditors, staff and customers,” MAA added.
In the meantime, MAA expressed concerns over the proposed appointments of Flavio Porro and William Van Vliet II, who were previously seated on KNM’s board during its financial distress period.
“We also highlight that Porro, an Italian qualified lawyer, was one of the only two EDs of KNM, at the material time of the default of KNM’s Thai bonds of 2.78 billion baht (RM354mil) on Nov 18, 2021.”
On Sept 5, Heeschen with his 7.91% stake, acting with other KNM shareholders, who represent a 10.68% stake in the group, filed a notice to remove all existing KNM directors.
Besides Tunku Yaacob, the group proposed to remove Tan Sri Zulhasnan Rafique, Ravindrasingham, Yee Hong Ho, Steve Ho Soo Woon, Thulasy Suppiah, Datuk Uwe Ahrens, James Beltran and Datuk Naresh Mohan.
They sought to appoint Johor Princess Tunku Kamariah Aminah Maimunah lskandariah Sultan Iskandar to replace Tunku Yaacob.
Six new directors have been proposed to take over their posts, including Heeschen himself and former KNM executive director Porro.
The others directors that Heeschen’s group has proposed to be appointed include former chairman of Magna Prima Bhd and Komakcorp Bhd Datuk Abd Ghani Yusof; Jiankun International Bhd CEO Edwin Silvester Das; SMTrack Bhd executive director Datuk Zaidi Mat Isa @ Hashim, and CN Asia Corp Bhd ED Van Vliet.
