KUALA LUMPUR: Practice Note 17 (PN17) company KNM Group Bhd
will be delisted from the official list of Bursa Malaysia on Nov 5, following the rejection of its regularisation plan by the stock exchange.
In a filing with Bursa Malaysia, the group said it had decided to withdraw its appeal against the delisting decision and has submitted a formal notification to Bursa Malaysia.
“Following the withdrawal of the appeal, the company will abide by the decision. Accordingly, KNM’s securities will be delisted from the official list of Bursa with effect from Nov 5,” said KNM.
The company said the decision was made after careful deliberation by the board, taking into account the best interest of all stakeholders, including shareholders, creditors and employees.
KNM has engaged in several sale and purchase agreements (SPAs) to divest non-core or underperforming assets, aiming to alleviate financial burdens and streamline operations.
It added that the successful completion of its SPA is crucial to its financial stabilisation efforts, noting that the regulatory timeframe for pursuing the appeal could affect the SPA’s completion schedule.
The group said that with a 35-year track record and a strong presence in the process equipment manufacturing industry, the board is confident the RM100mil retained working capital will enable it to rebuild and revitalise its operations.
“The board will focus on the operational and financial turnaround of the group.
“At the appropriate time, when the company’s financial health is restored, the board will consider a re-listing of KNM, subject to financial performance and requisite approvals,” it added.
In press releases to the media yesterday, KNM conceded that the delisting is a strategic move to accelerate its turnaround, and complete the disposal of Deutsche KNM GmbH (DKNM) to NGK Insulators Ltd (NGK), which it sees as a key milestone in its recovery plan.
The group said that the current trading price of its shares of half a sen already reflects minimal value, making the impact of delisting largely symbolic.
“Remaining listed under PN17 does not support any fundraising actions. Being listed as a PN17 company has also affected KNM’s image and credibility with clients and investors.
“Delisting, therefore, allows KNM to move faster, execute projects more effectively, and focus on restoring profitability without any delays,” it said.
Outlining the path forward, KNM said with RM100mil in working capital secured from creditors, the group will reinvigorate its Malaysian operations and strengthen customer confidence.
It added: “Once profitability and stability are restored, KNM’s large base of approximately 33,000 shareholders provides flexibility for a future relisting without the stresses for acquiring the required shareholder spread in any initial public offering exercises.”
Furthermore, it pointed out that the delisting also enables it to complete the €270mil sale of DKNM to NGK, which is the highest and most credible offer it has received, encouraged by the fact that NGK is prepared to pay in full upon completion without external financing requirements.
Aside from the working capital fund, the manufacturer said it creditors are also waiving all accumulated interest, penalties and charges; while accepting a five-year, zero-coupon deferred settlement of just over RM200mil.
“KNM has endured some of its toughest years and is now on the verge of transformation. If delisting is what it takes to complete the NGK sale, eliminate debt and restore growth – it is a necessary step forward,” said chief executive Ravindrasingham Balasingham.
The delisting is still subject to shareholders’ approval at an EGM on Oct 30, with the group noting that the disposal of DKNM is expected to strengthen KNM’s balance sheet by paring down RM1.3bil in debt and securing RM100mil in cash to support turnaround efforts.
