KUALA LUMPUR (Aug 1): KNM Group Bhd (KL:KNM), an oil and gas services provider, has finally secured a new buyer for its Italian subsidiary FBM Hudson Italiana SpA (FBMHI), following three failed attempts since the proposed disposal was first announced in May 2023.

Financially troubled KNM in a filing with Bursa Malaysia on Friday said it has received a binding and irrevocable offer from Swiss-based SymbEx GmbH and Germany’s Terragarda GmbH to acquire FBMHI and its United Arab Emirates (UAE) unit for a €19.50 million (about RM101 million) consideration. It did not provide further information on the buyers.

KNM’s Dutch unit, KNM Europa BV, received an offer on July 9 amounting to €8 million in cash and the takeover of €11.5 million in intercompany debt owed to FBMHI, a company that mainly makes heat exchangers and high-pressure equipment.

SymbEx and Terragarda will also assume all assets and liabilities of FBMHI, conditional on the net assets of FBMHI exceeding €10 million. FBMHI has up to €35 million in existing debt in the form of banking debts and significant non-trade creditor liabilities.

Under the proposal, Terragarda will also need to provide €3.20 million to FBMHI as a convertible loan, specifically to repay a term loan owed to the Italian lender Banco Popolare di Milano within two weeks of KNM Europa’s confirmation of exclusivity. The two firms also agreed to inject €5 million in fresh working capital.

KNM Europa has granted a 60-day exclusivity period to the Swiss and German firms for due diligence and negotiation of a definitive sale and purchase agreement (SPA), with a possible 30-day extension pending regulatory clearance.

“The parties are targeting a completion of the proposed disposal of FBMHI within a timeframe of 60 to 90 days from the acceptance of the offer,” it said, while noting that this could be extendable up to 180 days depending on the Golden Power clearance by Italian authorities.

KNM said the proposed disposal is part of the group’s strategic move to secure the long-term viability of FBMHI. FBMHI, despite recent profitability, requires a significant and immediate injection of new capital, according to KNM.

“This capital is essential for comprehensive debt restructuring, augmenting working capital to support its substantial tender pipeline and funding future growth initiatives,” KNM said. “The board acknowledges that such financial resources are not presently available at the KNM Group level due to the ongoing restructuring efforts,” it noted.

KNM previously had three different attempted buyers for FBMHI, all of which ultimately fell through. The first was British Midland FZE, which offered €12 million in May 2023, but the deal did not materialise for undisclosed reasons.

In November 2023, UAE-based Petro MAT FZCO made a higher offer of €22 million, but this was rejected by the Italian government due to a failure to obtain Golden Power clearance. Meanwhile, in March 2024 — a joint €16.5 million offer from Italy’s BM Carpenterie Oil & Gas Srl and Officine Piccol SpA — was also blocked for the same regulatory reason.

On a separate asset, 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 deal also came following several subsequent failed attempts to sell.

The latest deal saw KNM's share price close 20% or half a sen higher at three sen on Friday, valuing the cash-strapped group at RM101.15 million.