PETALING JAYA: Cash-strapped KNM Group Bhd
has finally struck a deal to dispose of its crown jewel Borsig GmbH to a Japanese buyer for €270mil (about RM1.25bil).
According to a well-placed source, KNM has signed the sale and purchase agreement with the NGK Group of Japan earlier today.
Last July, StarBiz had reported that a “huge diversified Japanese multinational corporation” has made a substantial bid to acquire Borsig.
“If the sale to the Japanese party goes through, it will be more than enough to clear KNM’s debt and put some extra cash on the table,” a source said at that time.
The KNM counter is suspended today from 9am to 5pm, pending the release of a material announcement. The shares were last done at 5.5 sen apiece at the close of trading on Wednesday.
Borsig is a German process equipment maker. The company was last valued at over RM1bil.
The market capitalisation of KNM, a Practice Note 17 company, is just about RM223mil.
Interestingly, in an interview with StarBizWeek in September 2023, KNM chairman Tunku Datuk Yaacob Khyra said KNM will have a better deal by floating Borsig compared to an outright sale.
“If we go for a direct sale, we would get a lower valuation, for example about seven times price-to-earnings (PE) ratio.
“Instead, by listing Borsig, we would get a PE of 15 times and with that, a much higher sale proceeds,” he said then.
Tunku Yaacob’s plan to list Borsign on the Singapore Stock Exchange did not take place.
As of end-Sept 2024, KNM’s total borrowings stood at RM1.27bil. Cash and cash equivalents stood at RM164.4mil.
