KUALA LUMPUR (Nov 6): Delisted KNM Group Bhd said its shareholders have approved the €270 million (RM1.34 billion) sale of German unit Deutsche KNM GmbH (DKNM), which houses the group's crown jewel Borsig GmbH.
The approval, which came a day after the group was delisted from Bursa Malaysia, was the final condition precedent holding up the deal.
“Successfully closing the disposal of DKNM to [Japan’s] NGK Insulators Ltd is a big step towards the turnaround of KNM, and the overwhelming support from shareholders today — as the last outstanding condition precedent — is key to sealing this deal,” KNM chairman Tunku Datuk Yaacob Khyra said in a statement on Thursday.
According to KNM, an overwhelming majority — 93.74% — of shareholders present at the extraordinary general meeting (EGM) voted to approve the sale.
KNM said the deal will strengthen the group’s balance sheet by reducing its debt obligation and providing working capital to revitalise its Malaysian operations.
“This approval marks an important step in restoring KNM’s financial health and setting the stage for sustainable growth.
“We are grateful to our shareholders for their confidence and to all stakeholders who have stood by KNM throughout this journey,” KNM chief executive officer Ravindrasingham Balasingham said.
Tunku Yaacob-led MAA Group Bhd (KL:MAA) is a major shareholder of KNM with an 18.43% stake. He also holds another 0.94% stake via Melewar Industrial Group Bhd.
The shareholders' approval seemingly puts an end to the saga surrounding the DKNM sale and allows KNM to move forward with its regularisation plan, which had been facing obstacles.
The sale is part of KNM’s regularisation plan, together with a share capital reduction and consolidation, which was mooted in August.
Bursa Malaysia Securities Bhd rejected the plan on Oct 3 after the regulator determined that KNM was unable to prove it could grow and sustain its business and address the issues that led to its financial problems.
The sale of DKNM will leave KNM with a struggling Malaysian operation. However, KNM argued that it would free up capital to pare down its debts and provide working capital for the restructuring of the Malaysian operation.
On Oct 27, KNM’s appeal against the regulator’s rejection was pulled back, as the group opted for a Nov 5 delisting to push through with the DKNM disposal.
On Oct 28, Bursa Securities had also brought MAA, CIMSEC Nominees (Tempatan) Sdn Bhd, KNM and its unit, KNM Process Systems Sdn Bhd, to court to stop a previously slated Oct 30 EGM from being held.
The bourse regulator said the court action against KNM and MAA, despite KNM’s planned delisting, aims to protect market integrity.
On Oct 30, KNM shareholders had agreed to adjourn the Oct 30 EGM to Nov 6, a day after the group’s delisting.
Shares in MAA closed unchanged at 18.5 sen on Thursday, valuing the group at RM47.51 million.
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