SO, the takeover management is reluctant to unveil their five-year plan until they take over. Why are they unwilling to share the details at this very instance so that the shareholders of KNM Group Bhd can make an informed decision?

Isn’t it normal to analyse all the details before deciding on a prospect of an investment? To do otherwise will be foolish as we know that the devil is in the details.

People’s livelihood are at stake, creditors have billions at stake, and our shareholders’ have already lost millions of ringgit.

Given the track record of the previous management (now the takeover management) that was instrumental in reducing KNM stock price to 3.5 sen in October 2022 (its historical low), it is imperative that they share the details of their five-year plan.

No more “pie in the sky” statements, please.

Also, let’s analyse what they have said - to raise bond or debt to settle debt. So, how much debt? At current juncture, one has to raise much more than RM2.0 bil (including inter-company debts) to pay off the existing debt of RM2.0 bil.

Additionally, there must be sufficient funds in place to build the Peterborough Green Energy Ltd plant in the UK and to re-start the Impress Ethanol Co Ltd (IEL) plant in Thailand that the previous management mothballed) as well as re-capitalise FBM Hudson Group which under the current deal negotiated (by the current management) is being funded by the buyer who has already invested €11 mil (RM55 mil) in the group.

And do not forget that the total debt of the KNM stands at RM2.0 bil (including inter-company debts) at present time which the previous management created.

So if the takeover management team is going to borrow by issuing bonds and to create an even larger debt burden than at present time, how are that going to be repaid or serviced (at current higher interest rate level)?

Please note that at the same time as borrowing a larger amount of debt, the takeover management is going to ask the current creditors of KNM to take a haircut. Will any new creditor lend any money to such a borrower?

Is this their strategy? Does the takeover management think the shareholders of KNM or the creditors of KNM are going to accept this as a workable strategy and support them?

At least get your numbers right. The current indicative market valuation for Borsig GmbH (KNM’s crown jewel) at IPO (initial public offering) is €345 mil (RM1.73 bil). It is not US$300.

Please read the media releases KNM made in recent times. The current KNM board can tell you that with the proposed Scheme of Arrangement (SOA) if approved by our creditors on Oct 12 (this Thursday), our quarterly losses will definitely be reduced by RM25 mil under our win-win solution with the support of our creditors.

This benefit will begin retrospectively from April 1, 2022. In return, we are proposing to pay our creditors 100% of their principal under our proposed SOA.

We see our creditors as our partners and in this way, when we return to borrow from same banks post our restructuring after June 30, 2024,, they know that we (the current management) are working hard to clear the mess created by those previous to us and will honour our debt commitments.

Basically, we are establishing trust. We want to make KNM bankable in all sense of the word - again!

Moving forward we will ensure that our shareholders are not exposed by over-gearing the group which is the reason we are in this situation now.

Please appreciate that the primary corporate social responsibility of any corporation is to ensure that we create a sustainable future for our business so that our employees, creditors, shareholders and other stakeholders can have a dependable future.

That is exactly what the current management and board of directors of KNM has been working towards and will continue to do so with the support of all our stakeholders. - Oct 10, 2023

Ravindrasingham Balasingham is KNM Group Bhd’s CEO/executive director since Nov 8, 2022. 

https://focusmalaysia.my/the-ultimate-aim-of-knms-current-mgmt-is-to-trim-colossal-debts-within-9-months-achieve-sustainable-future/