KUALA LUMPUR (Oct 30): A day prior to the Oct 31 deadline to submit its regularisation plan, KNM Group Bhd, which was recently embroiled in a boardroom tussle, announced that it needs another year to work on its regularisation plan.

According to a bourse filing, the oil and gas engineering group submitted the extension of time application to Bursa Securities on Monday, seeking a one-year extension to Oct 30, 2024 to submit its regularisation plan.

“The outcome of the application of the said extension of time application will be announced upon the decision received from Bursa Securities,” it added.

KNM’s management has guided that the company is in the midst of listing its crown jewel Borsig on the Singapore Stock Exchange (SGX) to resolve its financial woes. The listing exercise on the SGX was first announced to the investing public almost two years back in December 2021.

Interestingly, German businessman Andreas Heeschen has emerged as a new shareholder, buying a 7.91% stake or 320 million shares, although financially stressed KNM has been defaulted on loan repayments.

A group of shareholders of KNM, led by Heeschen holding a 8.25% stake, wanted to remove the nine board members, including chairman Tunku Datuk Yaacob Khyra. However, they only managed to remove two directors — Tan Sri Dr Zulhasnan Rafique and Steve Ho Soo Woon — in an extraordinary general meeting on Oct 16.

The boardroom fight happened in early September, slightly less than two months prior to KNM’s deadline to submit its regularisation plan. Coincidently, all these were unfolded shortly after the company completed two tranches of share placement at five sen and 5.4 sen respectively in the first half of the year.

KNM’s share price started climbing from six sen on May 31 to a high of 17.5 sen on Oct 5. The stock closed at 10.5 sen on Monday, giving it a market capitalisation of RM405.51 million.

KNM triggered Practice Note 17 (PN17) criteria on Oct 31 last year, after its auditor highlighted a material uncertainty related to its ability to continue as a going concern in its audited financial statements for the period ended June 30, 2022, with shareholders’ equity on a consolidated basis less than 50% of its share capital.

Accordingly, the group was classified as an affected listed issuer under PN17, and was required to submit its regularisation plan to relevant regulatory authorities within a year — by Oct 31, 2023.

During this period of time, KNM intended to sell its German-based machinery and equipment manufacturer Borsig GmbH to resolve its liquidity issues. However, the deal failed to materialise, leading the cash-strapped outfit to subsequently default on three credit facilities totalling about RM416.8 million in December 2022.

KNM is in the midst of resolving its outstanding debt with creditors, with a proposed listing of Borsig forming the centrepiece of its scheme of arrangement.

As of end-June this year, KNM’s borrowings stood at RM1.18 billion. It had been loss-making for eight consecutive quarters, with accumulated losses of RM1.21 billion.

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