KNM Group plans full debt settlement, calls creditors' meeting
KNM Group Bhd is proposing a debt settlement plan that offers full principal recovery to creditors, with repayments tied to asset sales and proceeds from the Borsig deal.
PETALING JAYA : KNM Group Bhd has called for a court-convened meeting with its creditors to present a debt settlement plan involving RM1.188 billion in compromised debt.
In a statement today, the company said it is proposing a Scheme of Arrangement (SoA) that will offer creditors full recovery of principal debt owed.
Creditors have also agreed to waive RM182 million in accrued interest and penalties as of June 30, 2023, it added.
Under the plan, creditors will be repaid via a five-year Zero Coupon Redeemable Unsecured Loan Stock (RULS) issuance worth RM204 million.
According to KNM, the repayment will come from proceeds of the Borsig sale to Japan's NGK Insulators Ltd, and the sale of three other assets in Thailand, the UK and Malaysia.
To support its core operations, KNM also said that its creditors had agreed for it to retain RM100 million in cash from the Borsig deal as working capital to revive its fabrication business in Malaysia.
KNM chairman Tunku Yaacob Khyra called the RM100 million capital retention 'a turning point' for the group.
'The initial certain cash of RM100 million will ensure that KNM will be on a very strong footing in rebuilding operations and growing the business,' he said.
CEO Ravindrasingham Balasingham thanked creditors for their support and ongoing engagement, calling the SoA 'a reflection of confidence in KNM.'
'It secures 100% settlement of principal for the creditors and the necessary funds for rebuilding KNM's future operations. This scheme is great for the creditors, customers, employees and shareholders of KNM,' he said.
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