KUALA LUMPUR: The group involving German billionaire Andreas Heeschen is looking to raise 110 million euro (RM550 million) bond from European institutional investors as a key step in its debt restructuring plan for KNM Group Bhd.
Heeschen and Johor princess Tunku Kamariah Aminah Maimunah Iskandariah Sultan Iskandar are leading the group to oust the entire existing KNM at an extraordinary general meeting g on Oct 16.
The group plans to use certain collaterals backed by KNM's assets, setting the stage for the company to start repaying creditors within 90 days after it takes over the helm.
The group also includes William H Van Vliet III, Flavio Porro, Edwin Silvester Das, Datuk Zaidi Mat Isa @ Hashim and Datuk Abd Ghani Yusof.
"We are confident that we can deliver a bond to already identified European institutional investors to the tune of 110 million euro (RM550 million).
"The company has around RM1.1 billion of debt that needs to be structured. So if you get a bond of RM550 million, I think that is a good start," Heeschen said at the media briefing here today.
The Turnaround Plan
According to Heeschen, a shareholder capital injection of up to RM600 million may be imminent once the bond is in place and the company's financial position becomes clearer.
He said proceed from the possible bond will be used to reset KNM's balance sheet and provide the necessary capital.
"I have a relationship with many institutional investors from Europe and North America. I have been structuring debt practically all my life and these bond investors have been consulted by myself and by three individuals who I have worked with for over 20 years.
"Therefore, we are confident that this can be done in a relatively short period of time," he said.
The proposed management team today outlined a five-year plan that includes investments into existing assets.
They intend to inject additional business into the company to support capacity of all operating subsidiaries.
This includes investment into the Impress ethanol project in Thailand to restart the facility and potentially increase the size from 200,000 litres per day to 500,000 litres per day.
"This asset, like others in KNM, only lacks appropriate capital and management to turn into performing assets," said Heeschen.
Impact of Asset Sale
The group expressed concern over the current board's asset disposal plan.
It believes that the plan will not meet the needs of 34,018 KNM shareholders or allow significant shareholder value in the future.
Heeschen claimed that the sale of FBM Hudson Italiana is flawed in many ways.
During the last 10 months of the current board's management, he claimed that KNM had lost all of its lenders support, leading to a fall in the value and rendered it into a difficult situation.
He also said either the sale or initial public offering of Borsig GMB is a disadvantage because KNM will lose control of the money-making subsidiary.