KNM to convene creditors' meeting to finalise RM1.19bil debt settlement plan
In a statement, KNM said the SoA marks a key step in the group's financial recovery efforts, aiming to provide a fair and sustainable debt settlement solution for all stakeholders.
'The SoA, developed in close consultation with the company's major creditors, proposes full recovery of the compromised debt amounting to RM1.19bil for the combined group, with creditors agreeing to waive accumulated interest and penalties totaling RM182mil as of the cut-off date, June 30, 2023,' KNM said.
Under the terms of the proposal, creditors will receive 100% recovery of principal, reflecting a strong and responsible financial restructuring effort, as well as settlement through the issuance of a five-year zero-coupon redeemable unsecured loan stock (RULS) totalling RM204mil.
Additionally, KNM said repayment of the RULS will be made via a combination of proceeds from any funds released from the escrow account tied to the recent Borsig sale to NGK Insulators Ltd, as well as proceeds from the sale of three assets - Thailand, the United Kingdom, and the FBM Hudson facility.
'To strengthen KNM's ability to resume and grow its core operations, creditors have also agreed to allow the company to retain RM100mil in upfront cash proceeds from the Borsig sale. These funds will be utilised as working capital to revitalise and invest in KNM's fabrication operations in Malaysia,' it said.
To accelerate the repayment, KNM will use any excess funds—beyond the RM100mil initial cash injection and six months' working capital—to redeem outstanding RULS on a rolling basis.
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