Friday 14 Jun 2024
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KUALA LUMPUR (Nov 9): The Italian government has rejected the proposed disposal by KNM Bhd’s wholly owned subsidiary KNM Europa BV of its entire stake in FBM Hudson Italiana SpA (FBM Hudson), its Bursa Malaysia filing showed on Thursday.

KNM said the buyer, the United Arab Emirates' Petro MAT FZCO, had failed to obtain the Golden Power clearance from the Italian government, according to a letter from the company dated Nov 7.

According to the International Association of Defense Counsel, the Italian government's Golden Power refers to its special power to stop any foreign direct investment, or halt corporate transactions involving strategic assets that include defence, national security, and infrastructure such as transportation, energy, and communications.

FBM Hudson is primarily involved in the design and manufacture of heat exchangers and high-pressure equipment for oil and gas, oil refining, petrochemicals, chemicals, power and fertiliser businesses.

“Presently, the management of KNM is reviewing and discussing with all the parties concerned for the steps moving forward. Further development in relation to the proposed disposal will be announced in due course,” it said.

The requirement to secure this Golden Power clearance was not mentioned when the disposal was announced on Sept 8. It was only disclosed to Bursa on Sept 13 after the stock exchange operator sought further information on the transaction, when KNM said that Petro MAT will try to obtain this clearance from the Italian government as quickly as possible.

In early September this year, KNM’s unit agreed to dispose of its entire stake in FBM Hudson for €22 million (RM111.76 million).

The proceeds from the disposal were intended to be used to pay off creditors of KNM or its subsidiary KNM Process Systems Sdn Bhd, under a scheme of arrangements announced by the group on Dec 16, 2022.

Following the share disposal, the group is expected to incur a loss on disposal of approximately €19.78 million (RM99.09 million).

According to the group's previous filing to the local bourse, as of June 30, 2023, FBM Hudson has a net asset value of €40.64 million (RM205.94 million).

KNM shares closed unchanged at nine sen, giving the group a market capitalisation of RM364.13 million.

Edited ByLam Jian Wyn
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