German billionaire-led group of shareholders seeks to remove KNM directors
A cluster of individuals who own shares in KNM Group Bhd, headed by the recently prominent German billionaire Andreas Heeschen, has begun an unfriendly acquisition of the struggling and financially weak engineering company.
Heeschen, who surfaced as the second most prominent investor of Practice Note 17 (PN17) organization, possessing a 7.91% interest or 320 million shares last week, along with seven additional investors, have requested the dismissal of all nine directors within the company.
Tunku Datuk Yaacob Khyra, the chairman of KNM, holds the highest number of shares in the company, owning an indirect stake of 9.44% or 347.2 million shares through Melewar Industrial Group Bhd.
Heeschen holds the largest stake in the renowned firearms company Heckler & Koch, which is headquartered in Germany.
Heeschen, along with the group of people who are working together, own 10.69% of shares and attempted to designate Johor princess Tunku Kamariah Aminah Maimunah lskandariah Binti Sultan Iskandar as a director in place of Yaacob.
In addition to Yaacob, the team has suggested the elimination of the remaining members of KNM's board ― specifically directors Tan Sri Zulhasnan Rafique, Ravindrasingham Balasingham, Yee Hong Ho, Steve Ho Soo Woon, Thulasy Suppiah, Datuk Uwe Ahrens, James Beltran, and Datuk Naresh Mohan.
A total of six individuals have been suggested to assume the roles of directors. This includes Heeschen, who is putting himself forward, as well as Flavio Porro, a former executive director of KNM who left the company in December of the previous year.
In addition, the following individuals have been suggested for various director positions: Datuk Abd Ghani Yusof, who has previously held the position of chairman at Magna Prima Bhd and Komakcorp Bhd; Edwin Silvester Das, the current CEO of Jiankun International Bhd; Datuk Zaidi bin Mat Isa @ Hashim, who also serves as an executive director at SMTrack Bhd; and William H Van Vliet II, who also holds the role of executive director at CN Asia Corp Bhd.
The shareholders are seeking to organize an extraordinary general meeting (EGM) with the purpose of replacing the directors.
In addition to Heeschen, the individuals and entities who hold shares in the business are Azmi Osman, Tai Tean Seng, Kok Seng Ping, Jacqueline Lee Fei Fei, Chang Hui Kee, Sazini Abdullah, AZM Trading Venture Sdn Bhd, and Gan SMT Sdn Bhd.
Shares in KNM ended the day at the same price as they started, with no change at 10 sen, bringing the company's total value in the market to RM384.36 million. Throughout this year, the stock has experienced a significant increase of 100% since it was worth only five sen per share, and this growth began steadily in June.
The shareholders highlighted KNM's net tangible assets per share of 21 sen as of the conclusion of June in a statement declaring their request.
Missed Opportunities: Prospects Disappointed
KNM is the proud owner of Borsig GmbH, a prestigious machinery and equipment manufacturer from Germany. However, KNM is currently experiencing financial difficulties because they were unable to sell this valuable asset in order to reduce their debt load.
With its heavy debt burdens and limited available cash, KNM had previously decided to sell off Borsig for a sum of €220.8 million.
The agreement did not come to fruition, resulting in KNM being unable to meet its obligations on three credit facilities amounting to approximately RM416.8 million. As a result, the Practice Note 17 (PN17) status was activated.
It is important to mention that despite multiple extensions to the final date for the share sale and purchase agreement, the Borsig deal did not materialize.
Three weeks after not being able to pay back RM416.8 million, the company revealed that it also couldn't pay back the main amount of US$3.4 million and the remaining interest of US$16,104 to Bank of China (Malaysia) Bhd.
The team acknowledged that the payments would be addressed or reorganized based on their suggested plan of action.
Since that time, KNM has maintained communication with its creditors and emphasized its strategy to expedite the conversion of non-essential assets, including Borsig.
By the end of June this year, KNM's debts amounted to RM1.18 billion, which was lower than the RM1.26 billion from the previous year. The company has been incurring losses for eight quarters in a row. The negative funds increased to RM1.21 billion, compared to RM1.16 billion in the previous year.