KNM Group Bhd chairman Tunku Datuk Yaacob Khyra says that the worst is behind KNM and the company look forward to get back to normal business.
KUALA LUMPUR (Feb 27): KNM Group Bhd (KL:KNM) said on Thursday it is working with advisers to sell its other businesses following planned disposal of its key unit in Germany to a Japanese-based ceramic company.
Assets for sale include FBM Hudson Italiana SpA that manufactures heat exchangers, an ethanol plant in Thailand, and a UK-based waste-to-energy project, KNM Group said in a statement. In the meantime, the company said it will focus on its Malaysian operations.
“I would say that the worst is behind KNM,” chairman Tunku Datuk Yaacob Khyra told The Edge after the company announced the disposal of Deutsche KNM GmbH. “Now we've got to get back to normal business.”
That includes getting its plant moving in Gebeng, Pahang and in Tanjong Minyak, Melaka as well as “seriously look into our other investments,” he said.
On Thursday, KNM said it plans to sell its entire stake in Deutsche KNM to NGK Insulators Ltd for €270 million (RM1.26 billion). The disposal is classified as a major disposal as Deutsche KNM contributes 80.82% of KNM’s total revenue.
The proceeds will be used to deleverage KNM Group, which are expected to significantly reduce its total borrowings to RM15.05 million from RM1.27 billion and improve its gearing ratio from 3.94 times to 0.04 times.
KNM’s attempt in June 2024 to sell Hudson Italiana was rejected by Italian authorities by exercising their "Golden Power" legislation that allows the government to stop any foreign direct investment over national interest concerns.
However, there are still multiple challenges ahead for KNM Group, requiring the company to be “adaptable to switch midstream as it is a very dynamic situation and new opportunities and threats are arising all of the time.”
With the much improved balance sheet however, the focus now will be on growing the Malaysian operations “aggressively” while completing the other monetisation exercises, it said.
The cash-strapped company, loss-making since 2021, secured a new credit facility of €60 million (RM280.4 million) for its key Borsig subsidiary in December last year.
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