KNM Group Berhad has received overwhelming approval from its creditors for its Court-Convened Creditors’ Meeting on the proposed debt settlement scheme — marking a major milestone in the group’s turnaround journey.
The Scheme of Arrangement formulated in close consultation with KNM’s major creditors, will ensure full recovery of the compromised debt amounting to RM1.188 billion for the group. As part of the agreement, creditors have also agreed to waive accumulated interest and penalties totalling RM182 million as at 30 June 2023, signalling their strong confidence in KNM’s long-term prospects.
Under the SoA, creditors will receive 100% recovery of principal, underscoring KNM’s commitment to responsible restructuring. Settlement via issuance of a five-year Zero Coupon Redeemable Unsecured Loan Stock (RULS) worth RM204 million.
Repayment of the RULS will be funded from the release of escrowed funds linked to the recent sale of Borsig to NGK Insulators, Ltd, as well as proceeds from the sale of three key assets in Thailand, the United Kingdom, and the FBM Hudson facility.
To support KNM’s operational recovery, creditors have agreed to provide RM100 million in upfront cash from the Borsig sale proceeds. These funds will serve as working capital for the company’s fabrication operations in Malaysia.
In return, KNM has committed to accelerating repayment of the RM204 million outstanding by using any excess funds — beyond the RM100 million injection and up to six months’ working capital — to redeem RULS on a rolling basis.
