Under the draft SOA, the current board of KNM has undertaken to pay the principal in full for both the secured and unsecured creditors.
PETALING JAYA: KNM Group Bhd
says the postponed court-convened meeting on Oct 12 to a later date was ordered by the Court to address the concerns of the minority of creditors in value.
The Practice Note 17 (PN17) company stated it then held an informal creditors meeting on the same day where all the creditors were invited to attend for the purpose of engagement and addressing any queries they may have on the proposed debt restructuring plan or scheme of arrangement (SOA).
“A sufficient majority of the creditors in attendance of the informal meeting repeated their support of the draft SOA proposed by the current management. This will be presented in a court-convened creditors meeting which will take place soon,” KNM stated in a statement.
Under the draft SOA, the current board of KNM has undertaken to pay the principal in full for both the secured and unsecured creditors.
It has proposed a one-year moratorium for legal action against the cash-strapped company, but the creditors stated this condition applies only if the current board and management remains in place.
If there is any change of the board or management, this could lead to a creditors petition for liquidation and seizing of assets given as security, including its prized asset Borsig GmbH.
The draft SOA also includes a moratorium on all interest and penalty charges from April 2023 to end-June 2024. This move will lead to a profitable future for the KNM Group and uplift it from its PN17 status, the firm stated.
Furthermore, the above measures will ensure the proposed listing of 60% of Borsig group on the Singapore Exchange, it added.
The listing exercise is set to raise some RM900mil which is be partly used to pare group debt totalling RM1.2bil.
The other disposals under the SOA is the Thai asset – an ethanol plant – for 2.5 billion baht (RM328mil) and Peterborough Green Energy Ltd for £27mil (RM157mil).
The postponement comes days ahead of its EGM on Oct 16 for control of the company.
New major shareholder, German businessman Andreas Heeschen, and persons acting in concert are seeking to remove KNM’s existing board led by chairman and substantial shareholder Datuk Tunku Yaacob Khyra and replace them with their representatives as well as a proposed new business plan to address the company’s financial issues.
The tussle for control of KNM has attracted buying interest from existing and opportunistic new shareholders ahead of the virtual EGM on Monday.
KNM chairman Tunku Yaacob had bought 37 million shares from Oct 4 to Oct 6 from the open market via Melewar Industrial Group Bhd, KNM’s exchange filings revealed.
The purchase took Melewar’s deemed interest in KNM to 384.2 million shares or a 9.5% interest. Sarawak-based businessman Datuk Seri Mahmud Abu Bekir Taib has also joined the fray with the acquisition of 5.03% in KNM on Oct 6 from the open market and aligned himself with Tunku Yaacob to fend off the challenge from Heeschen, who acquired another 13.6 million shares on Oct 9 and 10 to raise his holding to 8.249%.
Heeschen’s interest in KNM is driven primarily by Borsig, which he had tried but failed to acquire in 2022 after partner, Sir Leonard Valentinovich Blavatnik, pulled out.
On Wednesday, KNM, Deutche KNM GmbH and Borsig filed a civil suit against two former executives, Flavio Porro and Terence Tan Koon Ping, for the terminated sale of Borsig to Vorsprung Industries GmbH in December 2022.
The plaintiffs alleged the defendants, as directors, had failed to obtain approval and had breached their duties, resulting in significant financial repercussions and a subsequent settlement with Vorsprung.
The legal action includes allegations of conspiracy, breach of loyalty, negligence and breach of statutory duties. The plaintiffs are demanding �3.44mil (RM17.2mil) from both of the former executives.
