KUALA LUMPUR (May 26): Loss-making KNM Group Bhd said its unit has proposed to divest FBM Hudson Italiana SpA to British Midland FZE for 12 million euros (RM59.1 million).

The deal between KNM Europa BV and British Midland is dependent on satisfactory due diligence within three weeks, said KNM in a bourse filing on Friday (May 26).

FBM Hudson Italiana manufactures heat exchangers and high pressure equipment for the oil & gas industry.

KNM had earlier aborted its proposed flotation of FBM Hudson Italiana and FBM-KNM FZCO (collectively known as FBM Group) by way of an initial public offering on Catalist, the sponsor-supervised board of the Singapore Stock Exchange.

The proposal was called off as it was deemed not feasible to be carried through, said KNM.

It added: "Given the financial state of FBM Group, which needs immediate restructuring and investment, and the current lack of resources at the holding company level, KNM, a disposal at the best price under the current circumstances would be the best solution."

KN Europa is wholly owned by KNM Process Systems Sdn Bhd, which in turn is a wholly-owned subsidiary of KNM.

KNM’s share price closed 0.5 sen or 7.69% higher at six sen on Friday, valuing the group at RM222.95 million.