KUALA LUMPUR (Oct 9): KNM Group Bhd (KL:KNM) has turned down a request from major shareholder MAA Group Bhd (KL:MAA) to hold an extraordinary general meeting (EGM) to approve the sale of its entire stake in Deutsche KNM GmbH (DKNM) for €270 million (RM1.33 billion), citing rules governing Practice Note 17 (PN17) companies.
In a filing with Bursa Malaysia, the company’s board of directors said it decided it could not meet the timeline for the EGM due to Bursa’s Main Market Listing Requirements, after careful consideration. The board added that as KNM is under PN17 status, it must follow these rules strictly to avoid further risks to its listing.
MAA, however, informed KNM on Wednesday (Oct 8) that it will proceed with calling the EGM under Section 313 of the Companies Act 2016 and has issued a notice to shareholders to vote on the proposed DKNM sale.
KNM said in a separate statement that it included an interim proposal in its appeal against Bursa’s rejection of its PN17 exit plan. This proposal would allow the company to proceed with selling DKNM to NGK Insulators, Ltd under the sale and purchase agreement.
The deal with NGK Insulators must meet all conditions by Oct 30, 2025. If successful by November, this would see KNM pare down its debt to the tune of RM1.3 billion and unlock RM100 million in funds for a turnaround plan, backed by a RM200 million debt facility.
KNM explained that if it waits for Bursa’s decision on its appeal before calling the EGM, it wouldn’t be able to issue the required 21-day notice in time, thus choosing not to proceed with the EGM now to avoid breaching listing rules.
The company stressed its focus is on completing the DKNM sale, which is crucial to its restructuring and survival.
KNM has been in financial distress and under PN17 status since October 2022. Selling DKNM — its most valuable asset — could help clear debts, but would leave KNM with only its struggling Malaysian operations. Bursa is not convinced the plan would restore the company’s financial health.
KNM's share price closed steady at half a sen on Thursday after a one-day suspension, valuing the company at RM20.2 million. Year to date, the stock has dropped 92.31%.