KUALA LUMPUR (April 8): Practice Note 17 (PN17) firm KNM Group Bhd (KL:KNM) said that MBSB Bank Bhd has withdrawn its lawsuit against its indirect unit over the default of a RM116.13 million Islamic financing facility.

MBSB withdrew the originating summons against Perwira Awan Sdn Bhd following negotiations, KNM said in its filing.

The withdrawal was made with liberty to file afresh, as indicated in a notice of discontinuation filed on April 4, said the oil and gas services firm.

In a separate statement, KNM said MBSB has expressed its support for KNM’s ongoing restraining order (RO) application, which aims to shield the company from legal action during its restructuring process.

The group previously said that it plans to seek an extension of the RO.

“This positive step reflects the trust and collaboration between KNM management and its creditors as we work towards achieving a fair and balanced resolution for all stakeholders,” KNM Group CEO Ravindrasingham Balasingham said.

Creditor support is essential, he said, for KNM to survive the current financial challenges and return to profitability.

Perwira Awan, a subsidiary of KNM Process Systems, was served with MBSB's originating summons on March 25, which sought to auction off the former's Kuantan land to settle the outstanding debt.

KNM in February announced a new €270 million (RM1.26 billion) deal to sell its German unit Deutsche KNM GmbH — the holding company of its main earnings contributor Borsig GmbH — to Japanese-based ceramic company NGK Insulators Ltd.

The group is also seeking buyers for its loss-making Italian subsidiary, FBM Hudson Italiana SpA, following a third failed attempt.

KNM’s share price closed unchanged at a record low of 3.5 sen on Tuesday for a market capitalisation of RM114.61 million. Over the past year, the counter has lost over 53%.

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