TUNKU Kamariah Aminah Maimunah Iskandariah Sultan Iskandar who has been nominated as chairman of the takeover board has pledges to steer KNM Group Bhd out of its PN17 (Practice Note 17) status while safeguarding the interests of creditors, employees, customers and shareholders.

She also firmly believes that current directors of the loss making and cash-strapped oil & gas (O&G) engineering outfit lack the necessary resources to affect a turnaround as acknowledged by its CEO Ravindrasingham Balasingham in a statement dated Sept 8 that “we lack the resources necessary to fund such turnaround”.

“Anyone can do asset stripping by selling assets of a company at distressed prices. But that would not be in the best interest of shareholders who would be voting next Monday (Oct 16). Certainly, the best alternative would be to obtain bridging (loan) and inject new money for turnaround,” she justified in a media statement.

Tunku Kamariah also defended the competency of the new directors whom she “has hand-picked” while expressing confidence in their ability to navigate KNM out of PN17.

She further outlined a vision for KNM over the next five years which includes injecting new capital, acquiring new assets to increase the current capacity of Borsig GmbH (the group’s crown jewel), substantial investments onto new projects, cooperating with inter-governmental bodies and securing new long-term contracts.

“We have the local and European resources to assist KNM to settle debt repayment. Possibly, a migration of debt in circa €160 mil (RM800 mil) via bridging loan and special bond issuance,” suggested the elder sister of current Johor ruler Sultan Ibrahim Sultan Iskandar who is poised to be the next Yang di-Pertuan Agong (YDPA).

“And we have the resources for capital raising of around RM400 mil via appropriate corporate exercise.”

Practise constraints

Tunku Kamariah also refuted claims that next Monday’s (Oct 16) extraordinary general meeting (EGM) “is not a Germany vs Malaysia competition as portrayed by some journalists who are shallow in analysing the situation” given majority of the proposed board members from her side are Malaysian citizens.

“Instead, it’s about a collaborative effort between Germans and Malaysians to rescue and grow KNM, create jobs and protect the interests of all shareholders who are mostly Malaysians,” she pointed out.

“The synergistic cooperation of the German and Malaysian parties is expected to deliver a steady annual growth of 10%-15%. We expect new businesses (from new networking); unprecedented synergetic approach and new markets from the Borsig Group.

“All other overseas units as well as the Malaysian plants are also expected to be re-capitalised and expand in the next five years.”

Tunku Kamariah also humbly advised the current board to refrain from making defamatory remarks and false statements concerning the takeover directors.

“All the defaming remarks by a certain website on the aspirant directors at the EGM are baseless and have to stop. There is no invisible hand behind this EGM.

“The smearing campaign by the same website on Datuk Seri Alex Teh Chee Teong as a Malaysian corporate mafia is indeed childish. On the contrary, DS Alex is a friend and businessman who has wide experience in corporate Malaysia,” she commented.

On the same note, Tunku Kamariah also defended German billionaire Andreas Heeschen who requisitioned the EGM as “a friend” invited to invest in Malaysia with the hope of restructuring KNM from its financial struggle while bringing in foreign direct investment (FDI) and job creation.

Borsig’s SGX listing unfeasible

Elsewhere, she also criticised certain irresponsible statements regarding KNM’s pricing/valuation at 40 sen/share, asserting that this does not align with the company’s net tangible assets (NTA) of 21 sen as reported in the latest quarterly report of KNM. “Such remarks were speculations, an attempt to influence investors,” she hit out.

Regarding the proposed listing of Borsig on the on main board of the Singapore Stock Exchange (SGX) by way of an IPO, Tunku Kamariah expressed doubts of the exercise given “certain percentage of revenue derived is from a country sanctioned by the Singapore government”.

“Furthermore, if pursued, this could potentially lead to KNM’s delisting as more than 75% of KNM’s revenue is currently from Borsig (chain listing),” she noted.

Tunku Kamariah also questioned the accuracy and comprehensiveness of the Explanatory Statement (ES) for KNM creditors dated Sept 26 as it should have been prepared by an independent advisor rather than done internally.

“To some extend the ES is defective. The ES documents claim that the shareholders have approved the Borsig listing on SGX. But the only approval identified is at the board level which is insufficient for a transaction of this magnitude. We need to ensure that proper procedures are followed.”

She added: “The current board had their chances to fix KNM for the past two years. In fact, key employees have resigned from the company. If you are really transparent and willing to fight for the interest of customers, employees, creditors and shareholders, come and team up with the new proposed directors - forming a unity board or make way for us.”

As for the announcement of the sales of FBM Hudson recently, Tunku Kamariah highlighted that “the documentation itself is incomplete”.

“Details of the sales & purchase (S&P) agreement were not made available to shareholders. I have taken notice of a whistleblower report. I will not intervene but to let the authorities make their own investigation. However, parties involved should explain to shareholders,” she stressed.

As she extends an olive branch to KNM’s present chairman Tunku Yaacob Khyra while presenting her vision for the company’s future, the business-savvy Johor royalty took the opportunity to welcome her “favourite businessman” Datuk Seri Mahmud Abu Bekir Taib “to vote in the EGM and assist in getting KNM out of PN17”.

Yesterday (Oct 9), the son of Sarawak Governor Tun Taib Mahmud emerged a substantial shareholder of KNM by virtue of his acquisition of 5.03% stake in the group from the open market.

At today’s mid-day break, KNM continued its downtrend by shedding 3 sen or 20.69% to 11.5 sen, thus valuing the company at RM465 mil. Since Friday’s (Oct 6) close, the group’s market capitalisation has dipped 32.4% (Oct 6: RM688 mil at 17 sen) - Oct 10, 2023

https://focusmalaysia.my/johor-princess-breaks-silence-categorically-states-why-knm-shareholders-must-vote-in-favour-of-takeover-board/