KUALA LUMPUR (Feb 16): Cash-strapped KNM Bhd has received two binding and irrevocable offers to acquire the entire stake in its Italian unit FBM Hudson Italiana SpA for a total amount of 16.5 million euros (approximately RM84.99 million).
The potential purchasers are Milan-based BM Carpenterie Oil & Gas SRL, which is offering to acquire 60% of the stake in FBM Hudson for 9.9 million euros, and Verona-based Officine Piccoli SpA, which seeks to acquire the remaining 40% stake for 6.6 million euros.
The offers came after the Italian government had in November 2023 rejected the proposed disposal by KNM Bhd’s wholly-owned subsidiary KNM Europa BV of its entire stake in FBM Hudson to the United Arab Emirates' Petro MAT FZCO.
“As KPMG Italy, the external auditor of FBM Hudson is unable to complete and finalise the audit of the financial statements of FBM Hudson, which is pending the valuation of FBMHI at this juncture, the company is therefore unable to ascertain the need to convene an extraordinary general meeting for the proposed disposal.
“This will be updated upon receipt of the final audit report from KPMG Italy,” KNM said in its filing.
Notably, the new offers would value FBM Hudson lower than the previous offer by Petro MAT at 22 million euros.
Prior to Petro MAT, KNM had another deal to dispose of FBM Hudson to British Midland FZE for 12 million euros, which did not materialise. At the time, KNM did not disclose the reason behind the change in buyer.
It was reported that Petro MAT had failed to obtain the Golden Power clearance from the Italian government.
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.
Commenting on the sale, KNM noted its current lack of resources, as well as the overall financial state of FBM Hudson, which needs immediate restructuring and investment.
FBM Hudson is part of FBM Group. The latter posted a loss after tax (LAT) of RM12. 57 million for the financial year ended June 30, 2023 (FY2023) compared with RM12. 07 million in the 18-month period ended June 30, 2022, and a profit after tax of RM1. 77 million in FY2020
The new potential purchasers will be given 15 business days from the acceptance of the offer to conduct due diligence.
Upon completion of the due diligence, all parties shall negotiate the sale and purchase agreement, with the objective of reaching the signing of the agreement two months from the acceptance of the offer, which is currently set at no later than April 30, 2024, KNM said.
KNM’s share price closed unchanged at 8.5 sen on Friday, valuing the group at RM343.9 million.
On Feb 8, MAA Group Bhd, linked to KNM chairman Tunku Datuk Yaacob Khyra, bought 2.25% stake in the group for RM15 million or about 16.5 sen apiece, raising Tunku Yaacob's indirect stake to 11.75%