KUALA LUMPUR (May 21): KNM Group Bhd’s German subsidiaries have secured new credit facilities of up to €200 million from various financial institutions, which will be used to settle certain existing credit facilities.

The new facility was secured by Deutsche KNM GmbH and Borsig GmbH from IKB Deutsche Industriebank AG, which acted as the arranger, agent and security agent (mandated lead arranger), and other participating financial institutions.

The facility is secured by pledges over all the shares/interest in Borsig Beteiligungsverwaltungsgesellschaft mbH and Borsig GmbH, respectively, KNM said in a stock exchange filing today. The tenure of the credit facilities shall be up to a maximum period of five years.

The credit facility shall ultimately be applied towards the full discharge and settlement of Deutsche KNM GmbH's and Borsig GmBH's existing credit facilities — inclusive of multi-currency guarantee facilities — of €220 million, which were earlier taken with UniCredit Bank AG as the lead arranger and other participating financial institutions.

"The credit facilities shall also be applied towards general corporate and working capital purposes of participating companies within the Borsig Group," KNM said.

KNM added that the new credit facilities will also enhance the financial debt maturity profile of KNM, together with Borsig Group, and improve the financial ratios as well as give rise to substantial savings in terms of interest expenses due the credit facilities’ lower financing cost.

KNM shares slipped half a sen or 2.63% to 18.5 sen today, giving it a market capitalisation of RM434 million. In the past one year, the stock has retreated nearly 8%.