KUALA LUMPUR (Feb 2): KNM Group Bhd, which recently defaulted on debts amounting to over RM420 million, is in talks with all its creditors to resolve the settlement of the monies due to them from the monetisation of non-core assets and sale of Borsig GmbH.
It said plans will be “accelerated” to monetise the assets under a disposal process based on a non-exclusive deal structure, which will also naturally lead to higher cash values on disposal.
In a filing to Bursa Malaysia on Feb 1, KNM said: “CGIF (Credit Guarantee and Investment Facility), TA (TransAsia Private Capital Ltd)/Danos [Ltd] and all other lenders (including Bank of China) are working in close cooperation with the board of directors and KNMG (KNM Group) newly appointed GCEO Ravi Balasingham towards achieving a mutually acceptable resolution of the settlement of the monies due to the respective lenders from the monetisation of non-core assets and IPO/sale of Borsig GmbH, as previously announced.”
KNM said it has been in continuous close discussion with the respective lenders on various measures to address the above-mentioned events of default.
“The repayments will be dealt with, addressed and/or restructured under the proposed scheme of arrangement as announced on Dec 16, 2022,” it added.
In a separate filing, KNM said the monetisation of assets is part of its regularisation plan as required under the Listing Requirements (LR) and it has approximately nine months to submit its regularisation plan under Practice Note 17 of the LR to the relevant authorities for approval.
KNM announced last December it defaulted on its loans totalling about RM416.8 million borrowed through three of its indirect wholly owned subsidiaries following the failed sale of Borsig GmbH.
The subsidiaries in question are Peterborough Green Energy Ltd — which was granted a loan of US$68.5 million (RM315.65 million) by Danos Ltd, as well as KNM Renewable Energy Sdn Bhd (KNMRE), which received a loan of US$13 million (RM57.17 million), and Splendid Investments Ltd, which was granted a loan of US$10 million (RM44 million). The loans KNMRE and Splendid Investments received were from TransAsia Private Capital Ltd.
KNM had stated it had received an originating summons filed by TA Private Capital Security to enforce its rights to effect the transfer of 45% shares in KNM Process Systems Sdn Bhd that was charged by KNM as security for the US$10 million loan granted by TransAsia Private Capital to Splendid Investments.
KNM reported it had earlier agreed with the lenders Danos and TransAsia Private Capital that it would utilise part of the RM1.03 billion proceeds expected to be raised from the proposed disposal of Borsig — which had fallen through — to repay the debts.
Later in the same month, KNM said it has triggered another default, this time on the principal repayment of US$3.4 million (RM15.04 million) — with an outstanding interest of US$16,104 — due to Bank of China (Malaysia) Bhd.
The default, via its wholly owned KNM Capital Labuan Ltd, occurred on Dec 26, said KNM in a Bursa filing on Dec 27.
It had originally planned to use part of the proceeds from the proposed disposal of Borsig to pay the instalment payments of the credit facilities that totalled US$8 million. But KNM announced on Dec 1 that the deal had been called off as the relevant conditions precedent had not been fulfilled, despite the longstop date for share sale and purchase agreement for the disposal being extended various times.