KUALA LUMPUR (Aug 11): Practice Note 17 (PN17) KNM Group Bhd’s (KL:KNM) scheme creditors have approved the group’s scheme of arrangement that will see them shave off RM182.04 million of interest and penalties from RM1.93 billion owed by the group’s wholly owned unit.
The requisite majority — 75% — of scheme creditors of each respective class approved the scheme at the court-convened meeting on Monday, the oil and gas services provider announced in a bourse filing.
“The proposed scheme of arrangement will become binding on the scheme companies and their scheme creditors upon an order of sanction being made by the High Court and upon such order being lodged with the Companies Commission of Malaysia,” it added.
The scheme involves creditors agreeing to waive RM182.04 million in interest and penalties owed by KNM’s wholly owned unit, KNM Process Systems Sdn Bhd (KNMPS).
This reduces KNMPS’s total debt from RM1.93 billion to RM1.75 billion.
At the group level, KNM owes a total of RM1.23 billion to its scheme creditors.
Most of this debt will be handled and repaid by its subsidiary KNM Process Systems Sdn Bhd (KNMPS) under the agreed scheme.
However, RM4.24 million (in other payables) and RM10.85 million (in intercompany debt) will not be covered by KNMPS and remain under KNM's direct responsibility.
Debt covered under the scheme is to be paid off using RM979.22 million of the expected €270 million (RM1.3 billion) proceeds from the sale of Deutsche KNM GmbH — the holding company of German-based machinery and equipment unit Borsig GmbH — and the issuance of RM204.8 million in new five-year zero-coupon redeemable non-convertible unsecured loan stock (RULS).
If sale proceeds and RULS are insufficient to cover the sum — as the potential proceeds of the disposal may be lower due to potential claims — KNM plans to sell Italy-based FBM Hudson Italiana SpA, a parcel of development land in the UK and its bioethanol plant in Thailand to address any shortfall.
Earlier in August, KNM announced that it secured a new buyer for Hudson Italiana. The group’s three prior attempts to offload the Italian subsidiary fell through.
The new offer, which was binding and irrevocable, came from Swiss-based SymbEx GmbH and Germany’s Terragarda GmbH to acquire FBMHI and its United Arab Emirates unit for a €19.50 million consideration.
KNM has until Oct 31, 2025, to submit its regularisation plan to Bursa Securities.
Shares in KNM ended unchanged at three sen, valuing the company at RM121.38 million.