KUALA LUMPUR (Nov 1): KNM Group Bhd has a tranche of RM370 million bond that is due this month in Thailand, which could be the first order of business for Tunku Datuk Yaacob Khyra who has joined the board as a non-independent non-executive director.
Yaacob, who is the executive chairman and controlling shareholder of MAA Group Bhd — the largest shareholder of KNM — had previously said in an interview with The Edge that the bond could be renegotiated or refinanced.
However, KNM has so far not made any announcement on the matter.
The previous board of KNM had put up Borsig GmbH — its largest income contributor — for sale, although Yaacob said Borsig should not be let go for a low price, as he believes it will be able to fetch a higher valuation when the oil and gas (O&G) industry’s outlook improves.
Borsig was acquired for €350 million (RM1.67 billion) in 2008, with the previous board of KNM seeking a minimum price tag of €300 million (RM1.47 billion) for the German-based company, according to a report by The Edge.
Besides selling Borsig, another option for the group would be to monetise the waste-to-energy project in Peterborough, the UK, which is supposed to be completed in June 2022.
The long-delayed 16MW project was started more than 10 years ago.
The group also has a bio-ethanol plant in Thailand parked under Impress Ethanol Co Ltd.
The speculation around the group potentially unlocking the value of its assets drove its share price up to a 17-month high of 31.5 sen on Sept 7, despite its stretched balance sheet and poor results for the first half of 2021.
As at end-June, KNM’s total borrowings stood at RM1.33 billion, with short term liabilities accounting for RM711.68 million of the total.
To service its debts, the group undertook three share placement exercises between June 2019 and January 2021, issuing a total of 800.71 million shares to raise RM134 million.
KNM also proposed a fourth private placement to raise up to RM167.8 million to repay debts, although this proposal was rejected by minority shareholders.
On Monday, KNM’s shares closed at 19 sen — a 40% plunge from the 31.5 sen peak — giving the group a market capitalisation of RM635.18 million.
MAA emerged as a substantial shareholder two months after a slew of boardroom changes at KNM, including the resignation of the company’s founder Lee Swee Eng’s spouse Gan Siew Liat as executive vice-chairman.
Yaacob previously said that Lee’s resignation was what triggered MAA’s move to acquire a stake in KNM, as there was no new major shareholder leading the firm, as well as positive prospects for the latter, in anticipation of better activity outlook for the O&G sector.
MAA is the largest shareholder of KNM with an 8% stake, followed by Lee with a 7.91% stake.
This story has been corrected to say that Tunku Datuk Yaacob Khyra has joined KNM's board as a non-independent non-executive director and not as the chairman as previously reported. The error is regretted.