PETALING JAYA: As KNM Group Bhd
teeters on the brink of delisting, the financially distressed engineering group has gained a crucial opening to push through the sale of its prized German asset.
The Practice Note 17 (PN17) company announced that shareholders have approved an adjournment of its EGM on the proposed €270mil (RM1.32bil) sale of its subsidiary, Deutsche KNM GmbH (DKNM), to Japan’s NGK Insulators Ltd.
Under the resolution passed on Oct 30, the EGM – originally convened to vote on the disposal – will now take place on Nov 6, a day after KNM’s scheduled delisting from Bursa Malaysia on Nov 5.
The company said no fresh notice is required as the adjourned meeting will reconvene within 30 days of the initial session and will carry the same agenda and resolutions.
The timing of this adjournment is critical.
Once delisted, KNM will no longer fall under the Main Market Listing Requirements, which mandate prior approval from Bursa Malaysia before a listed entity can undertake a major disposal.
This effectively means KNM can move forward with the sale of DKNM without facing further procedural hurdles from the exchange.
Bursa Malaysia, however, has taken an unprecedented step to block KNM from proceeding with the transaction, filing a court injunction to restrain the company and several related parties from tabling or discussing the DKNM disposal resolution before obtaining the necessary regulatory clearance.
The exchange said its action was taken “to uphold listing and disclosure requirements” and to ensure compliance with its rules governing major transactions.
“The integrity of the capital market is paramount, and the exchange will continue to take all necessary steps to uphold public confidence and maintain orderly market operations,” Bursa Malaysia said in a statement, underscoring its role as gatekeeper of transparency and investor protection.
However, KNM, in a filing with the bourse on Oct 29, said the High Court hearing on Bursa Malaysia legal action did not stop the EGM set for Oct 30.
KNM’s delisting process has been closely watched by investors and creditors.
The company, once a market darling with global oil-and-gas engineering ambitions, slipped into PN17 status in 2022 after years of financial strain, high debt levels, and inconsistent earnings.
Following the withdrawal of its appeal against delisting on Oct 27, KNM’s securities will be officially removed from the official list on Nov 5.
Until then, it remains under Bursa Malaysia’s jurisdiction, but from Nov 6 onward, the group will operate as an unlisted entity – free from public-market disclosure rules but also without access to equity fundraising via the exchange.
For group chief executive officer Ravindrasingham Balasingham, delisting marks not an end, but a beginning.
He insisted that KNM has not breached any regulations, and that the company’s actions have been both transparent and in accordance with the law.
“With the delisting of KNM on Nov 5, KNM can progress with the shareholders’ EGM for the proposed disposal of DKNM on Nov 6, without any further challenges,” he told StarBiz.
“Moreover, future corporate actions by KNM will be executed with greater ease.
“This will expedite the whole turnaround of KNM once we receive the RM100mil from the sale proceeds of the DKNM disposal.
“All stakeholders of KNM will benefit from such an outcome.”
He added that delisting would allow KNM to act more decisively on operational restructuring and cost rationalisation without the delays often associated with exchange approvals and investor disclosure requirements.
The proposed sale of DKNM, which owns the group’s key engineering and manufacturing assets in Germany, is viewed internally as the most viable way to stabilise the company’s finances.
Proceeds from the disposal are expected to be channelled toward repaying debts and supporting a broader turnaround plan for KNM’s Malaysian and European operations.
According to the company, about RM100mil from the proceeds will flow directly into its working capital.
The German asset, located in Rheinfelden, is considered one of KNM’s crown jewels – housing advanced manufacturing capabilities that have attracted interest from multiple international buyers in recent years.
The proposed buyer, NGK Insulators Ltd, is a reputable Japanese industrial ceramics and engineering group, suggesting that the disposal could proceed smoothly once legal obstacles are cleared.
