KUALA LUMPUR (Nov 18): KNM Group Bhd said it has missed principal and coupon payments on bonds issued in Thailand worth 2.78 billion baht (RM352.57 million) which matured on Thursday (Nov 18).

The oil and gas equipment and services group blamed this on the challenges arising from Covid-19 and the unfavourable operating conditions of its subsidiary Impress Ethanol Co Ltd (IECL) that operates an ethanol plant in Thailand.

In a bourse filing, KNM said it is in an advanced stage of discussions with several financial institutions to secure new financing for the repayments of the bonds.

However, it said final approval decisions for these new financing facilities are not expected to be made until after the maturity date of the bonds.

KNM, whose share price has fallen nearly 44% from its peak of 32 sen in early September, said it has a grace period until Dec 2 to pay the principal sum, and until Dec 9 to pay the coupon before an event of default occurs.

The bonds are guaranteed by Credit Guarantee and Investment Facility (CGIF), a trust fund managed by the Asian Development Bank.

"The non-payment event may have an adverse impact on the financing facilities of KNM and its subsidiaries (KNM Group) in the event that the respective financial institutions suspend their financing facilities granted to KNM Group pending the resolution of the non-payment event.

"Nevertheless, KNM shall endeavour to continue its other remaining business operations notwithstanding the non-payment event and will engage with the lenders and suppliers for their continuing support," the group said.

KNM said it has appointed consultants to monetise its investments, including disposal of assets or shares in IECL.

"KNM is in close communication with CGIF on KNM's ongoing refinancing plans to address this non-payment event and where applicable, to reimburse CGIF the guaranteed amount paid by CGIF to the bondholders.

"Under the guarantee agreement between CGIF and the Bank of Ayudhya Public Co Ltd who is the bondholders' representative for and on behalf of all bondholders, the bondholders have the rights to make a demand for payment of the guaranteed amount from CGIF within the demand period in the event that the non-payment event is continuing after the grace period," it added.

Shares of KNM rose 5.88% or one sen to 18 sen, giving the group a market capitalisation of RM601.77 million. The counter has fallen 18.18% year-to-date, and by 43.75% from its peak of 32 sen on Sept 7.