KNM Group Bhd has decided not to go ahead with the sale of its crown jewel, Borsig GmbH, after deciding not to extend the long-stop date beyond the Nov 30 deadline.
In a stock exchange filing yesterday, KNM said it will now consider other methods of monetising its investment in Borsig, either through the sale to other potential purchasers or through undertaking a potential listing exercise on any other primary stock exchanges.
KNM said the longstop date agreed in the share sale and purchase agreement regarding the proposed disposal had been extended various times.
In the announcement dated Oct 31, the board had informed about the last extension in principle until Nov 30. The delay of the €220.8 million (RM1.05 billion) disposal was mutually agreed on by KNM and buyer, Germany-based GPR, a unit of Vorsprung Industries SCSp.
“This date has passed without the closing of the transaction having occurred, since relevant conditions precedent have not been fulfilled.
“The board wishes to announce that after several discussions and negotiations with the purchaser, the board is not convinced that the closing conditions, in particular regarding the financing of the proposed disposal, will be satisfied swiftly.
“After due consideration of all aspects of the proposed disposal, in the best interest of the company and its stakeholders, Deutsche KNM GmbH has decided not to further extend the longstop date of the proposed disposal and instead has exercised its withdrawal right under the share sale and purchase agreement.
“Hence, the proposed disposal will not materialise,” KNM said.
KNM had proposed Borsig’s disposal with €206.55 million to be used to pare down the group’s debt, including €12.93 million in repayment of the cash upstream loan receivables to Borsig.
At end-September, KNM had total borrowings of RM1.21 billion, down from RM1.26 billion a quarter ago. Some RM1.07 billion are short-term borrowings. Cash balance stood at RM63.48 million.
Shares in KNM closed unchanged at 5.5 sen yesterday, translating to a market capitalisation of RM202.3 million. — TMR