This article first appeared in The Edge Malaysia Weekly on October 13, 2025 - October 19, 2025

The key to oil and gas engineering company KNM Group Bhd’s (KL:KNM) restructuring lies in the sale of its wholly-owned European subsidiary, Deutsche KNM GmbH (Borsig).

In February, the group signed a sale and purchase agreement with Japan-based NGK Insulators Ltd for €270 million (RM1.32 billion) for the disposal of Borsig. The proceeds were intended to settle KNM’s RM1.33 billion debt, effectively giving the company a clean slate. The restructuring plan also includes capital reduction and share consolidation.

So far, however, the group, whose single-largest shareholder is MAA Group Bhd (KL:MAA) with a 19.37% stake, has yet to finalise a regularisation plan.

On Oct 3, Bursa Malaysia rejected KNM’s regularisation plan and set Nov 5 as its delisting date. KNM is currently appealing the decision.

For its part, MAA petitioned the board for an extraordinary general meeting (EGM) to approve the disposal of Borsig. But, in a surprising turn of events, the board rejected the request on the grounds that it would be unable to meet the timeline to convene the EGM, owing to the regulatory requirements of the listing rules.

Nevertheless, MAA is proceeding with the EGM on Oct 30 to seek approval for the Borsig disposal.

If KNM is delisted, Borsig will become a private asset, with shareholder and creditor interests protected under the Companies Act.

While this should make no difference on paper, in reality, KNM’s transparency and level of scrutiny will be significantly reduced as a private company compared to when it was listed.

The KNM board comprises 10 members and is headed by executive chairman Tunku Yaacob Kyra, whose flagship company is MAA.

The board’s rejection of an EGM is strange and raises questions. Is it tantamount to MAA not being adequately represented on the board? 

The deal to sell Borsig was announced in February. Considering that the deal was central to KNM’s restructuring, why didn’t MAA push for the completion of the sale much earlier? Why leave it to the last minute?

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