KUALA LUMPUR (Oct 11): Germany billionaire Andreas Heeschen has upped his stake in KNM Group Bhd to 8.249% following the acquisition of a further 13.6 million shares or a 0.336% stake in the open market.
Interestingly, Heeschen’s purchase of the shares occurred a few days before the group's extraordinary general meeting (EGM), which is scheduled for Oct 16.
In a bourse filing on Wednesday, KNM said Heeschen bought the block of shares in two tranches, of which 3.6 million shares were bought at 14 sen per share on Oct 9 and the remaining 10 million shares were bought the following day at 11.99 sen per share.
Cumulatively, the blocks of shares would have cost him RM1.7 million.
To recap, on Aug 29 Heeschen, who is majority shareholder of German-based firearms manufacturer Heckler & Koch, emerged as KNM’s substantial shareholder with a 7.91% stake, or 320 million shares.
Out of the 320 million shares, about 200 million were via a transfer of title and interest to him under “the terms of governing agreement”. KNM’s share price closed at nine sen on Aug 29.
Subsequently, Heeschen, 63, with the support of eight other KNM shareholders, applied to hold an EGM to replace the directors. The shareholders are Azmi Osman, Tai Tean Seng, Kok Seng Ping, Jacqueline Lee Fei Fei, Chang Hui Kee, Sazini Abdullah, AZM Trading Venture Sdn Bhd and Gan SMT Sdn Bhd.
Heeschen, who together with the parties acting in concert held a 10.69% stake back then, attempted to oust the entire board of nine directors, including the company’s largest shareholder and chairman Tunku Datuk Yaacob Khyra, who holds a 9.5% indirect stake or 384.2 million shares held via Melewar Industrial Group Bhd.
Besides Yaacob, the group has proposed to remove the rest of KNM’s board — namely directors Tan Sri Zulhasnan Rafique, Ravindrasingham Balasingham, Yee Hong Ho, Steve Ho Soo Woon, Thulasy Suppiah, Datuk Uwe Ahrens, James Beltran and Datuk Naresh Mohan.
Meanwhile, seven new directors have been proposed comprising Heeschen; Johor princess Tunku Kamariah Aminah Maimunah lskandariah Sultan Iskandar; Flavio Porro, a former executive director of KNM, who exited the company last December, as well as former chairman of Magna Prima Bhd and Komakcorp Bhd, Datuk Abd Ghani Yusof; Edwin Silvester Das, who currently serves as Jiankun International Bhd CEO; Datuk Zaidi Mat Isa @ Hashim, executive director of SMTrack Bhd; and William H Van Vliet II, executive director of CN Asia Corp Bhd.
KNM owns renowned German-based machinery and equipment manufacturer Borsig GmbH, but is facing liquidity issues as it was unable to sell the asset to pare its debt.
Burdened by its debt obligations and tight cash flow, KNM had previously planned to part with Borsig for €220.8 million.
The deal failed to materialise, which led to KNM defaulting on three credit facilities totalling about RM416.8 million and subsequently triggering the Practice Note 17 (PN17) status.
It is worth noting that the Borsig deal fell through despite the longstop date for the share sale and purchase agreement for the disposal being extended various times.
Three weeks after the RM416.8 million default, the company announced it had defaulted on the principal payment of US$3.4 million with an outstanding interest of US$16,104, due to Bank of China (Malaysia) Bhd.
The group noted that the repayments would be dealt with or restructured under its proposed scheme of arrangement.
Since then, KNM has continued its dialogue with creditors and stressed its plan to accelerate the monetisation of non-core assets as well as Borsig.
As of end-June this year, KNM’s borrowings stood at RM1.18 billion, down from RM1.26 billion a year earlier. The group had been loss making for eight consecutive quarters. Negative reserves stood at RM1.21 billion, up from RM1.16 billion the year before.
On Wednesday, the share price of KNM closed down one sen or 8.33% at 11 sen, bringing the group a market capitalisation of RM445 million.
The counter has more than doubled this year from five sen per share, following a gradual increase first seen in June.
Read Also: