Hiya everyone! Hope all is well. Looks like the price isn't going down below 9sen, which is a good sign to hold at this level until now. If only its subsidiary, KNM Process Services is injected into Borsig upon listing into SGX to push up its speed to have its presence in Malaysia and Asia generally, it will be very synergistic to KNM as a group.

@MacDee34, aah, okay, I see what you mean. Well, this company has a long way to recovery, hope it becomes a win-win situation for all.

Have you following up on Sapura Energy? It's another PN17 O&G company similar to KNM. SE has over RM10b debts, on the road to recovery, fell into PN17 one year earlier. But SE journey pretty smooth, recently they had a white Knight rescuing it.

In fact, a better story for today, the Federal Court repealed Act 498 of the Penal Code, saying that "it's criminal to entice a married woman." The Federal Court said that is somewhat implying that the woman is the Husband's possession, macam slavery lar.

https://focusmalaysia.my/federal-court-declares-section-498-unconstitutional-in-landmark-ruling/

While you were gone @MacDee34, a lot of good things happened, and KNM got their RO. However, it's still showing reds in their recently released quarterly report, although narrowed the gaps.

Hiya everyone, what's new? Been away "overseas" for funeral rites, just got home.

@MacDee34, long time no see. Hope you are in the best of health. Thanks for sharing the article. Reading in the Star Online this morning, the police denied it was a raid wor.... well, if a report of any issue is lodged, it's the police's SOP to investigate, they are doing their duty, as I see it, moreover for any public-listed company, as it's in the interests of the public anyway.

@Woodswater, hiya... how's things? You should have bought the AAX shares.

Here, this counter, it has mid-term definitely will give Chinese New Year ang pow. For Christmas, as long it maintains at 9sen, it's good already. 1 year of new RO was good news for KNM for a start. Next is the Jul-Sep 2023 results, if it shows +ve, good news for upliftment PN17 by Apr 2024.

Steve Ho is likely mixing the ingredients and cooking up a storm for Borsig's feast, let's see how it goes...the moment SGX confirmed its listing I reckon in end Feb/Mar 2024....

Good Friday everyone.... looks so quiet in here, and share prices gradually going up...Good to see +ve progress.

Hopefully, the year can end with more good progress announcements and a road to recovery for this company. In the past 12 months, the company has experienced bitter experiences and multiple obstacles.

Go go go KNM.... be the tiger of Asia!

@StrategistInvestLam, yay, indeed a very welcoming and relieved news, while the company finds its way to get out of these turmoil.
The Board of Directors of the Company wishes to announce that on 21 November 2023, the Company and KNM Process Systems Sdn Bhd (collectively referred to as the “Applicants”), as part of proactive measures and continuous effort to address the Applicants’ debt obligations in an orderly manner, applied to the High Court of Kuala Lumpur and were granted the following Orders:



(a) leave to be granted to the Applicants to call for a Court convened meetings pursuant to section 366 of the CA 2016 with the creditors of the Applicants or any class of them (“Scheme Creditors”) for the purpose of considering and, if thought fit, approving with or without modification (which modification can be made any time prior to and/or at the Scheme Meeting(s)) the proposed scheme of arrangement and compromise between the Applicants and the Scheme Creditors (“Proposed Scheme of Arrangement” or “SOA”); and



(b) a Restraining Order (“RO”) pursuant to section 368(1) of the CA 2016 in conjunction with the debt restructuring effort by the Applicants to address its outstanding financial obligations without having the threat of any proceedings and actions against the Applicants.

@MrMojo, today AAX have its PN17 uplifted. Well, an extension of 1 year means it has 4 quarters, the company needs 3 consecutive quarters of +ve profits, thats 9 months. So spare 1 quarter lor.... if come out early, save 1 quarter, otherwise you need 4 quarters @ 1 year lor....

There must be an underlying reason @ undercurrent as the share prices not dipping below 9sen, especially for a PN17 company encountering consistent blows of "hurricanes"... steady lar this company...😁

It's timely the company has clarified its reason for reappointment of Mr Steve Ho, who is the court appointed representative to sit in KNM board, fulfilling the Section 268 subsection 2(d). If the subsection 2(a) is satisfied, the Court of Appeal may overturn the High Court ruling due to technical issues. Well, looks like KNM has a "blinking light at the end of the tunnel. "

https://www.klsescreener.com/v2/announcements/view/5934517

Following the judicial management order, a wider range of creditor actions are restrained. There is a good balance between protecting creditors and encouraging prospects of a rescue. A judicial management order initially lasts for six months but can be extended for a further six months.

The appointment of a judicial manager displaces the directors. He or she manages the business and must within 60 days (which can be extended by the court) present a proposal to the creditors of the company. He or she has to summon a meeting of creditors to consider and vote on the proposal. The voting threshold is 75 per cent in value of creditors whose claims have been accepted by the judicial manager, present in person or by proxy. Any proposal that is approved is binding on all creditors, regardless of how they voted.

The judicial manager oversees the implementation of the proposal. Once the purpose of judicial management has been achieved, he or she may apply to discharge the order. If a proposal is not approved at the creditor's meeting, the court would normally discharge judicial management orders, and either receivership or liquidation beckons.

@MrMojo, yeah, it is possible that may happen.

However, if the management can prove that the company can be "saved", the court can exercise its jurisdiction to enforce judicial management. Judicial management is another of the new corporate rescue mechanisms under the CA 2016 that allows for the appointment by the Malaysian High Court of a judicial manager over an insolvent corporate debtor, in circumstances where it can be shown that there is a reasonable prospect of, inter alia, preserving all or part of the company as a going concern and where the interests of creditors would be better served than on a winding up.

@MrMojo, good question. Well, as a back up plan, the BNM actually has the mediation facility, called CDRC. Sapura Energy for example, had gone under CDRC, last March 2023 and was a 2nd RO extended due to this. Companies eligible to be admitted to CDRC shall meet the following criteria:
a) have an aggregate indebtedness arising under or in connection with any financing/loan agreements, arrangements or issuance of securities of at least Ringgit Malaysia Ten Million (RM10,000,000-00), and involving at least two (2) participating institutions; and

b) at the time of consideration by the CDRC, the applicant is not dissolved, in liquidation or in receivership and no such actions or conditions exists at this time which may result in a dissolution, liquidation or receivership of the applicant. In the event that any such actions or conditions exist at the time of consideration, necessary steps shall be taken
to keep such actions in abeyance. Nevertheless, an exception is given to those companies where Receivers have been appointed only over certain specified assets and that the Directors remain in control of the company's overall operations; and
c) the eligible debtor,
(i) has projected or demonstrated that it will imminently be in financial difficulty or is already experiencing difficulties in servicing their debt obligations but may not have already defaulted on its obligations; or
(ii) is a company listed on the Main Market or ACE Market of Bursa Malaysia that has been classified as a PN17 or GN3 company respectively.

5.2 Notwithstanding the eligibility criteria in paragraph 5.1, CDRC in its absolute discretion may
accept or reject applications as it deems fit.

5.3 CDRC in its absolute discretion may review and/or amend the eligibility criteria stipulated herein as it deems necessary for the purposes of preserving its overarching objectives of employment preservation and sustaining economic growth.

The CDRC (Corporate Debt Restructuring Committee) shall comprise at least seven (7) members having the requisite
experience in and from legal, accounting or regulatory backgrounds, including but not limited to the following person(s):
(i) the chairman of the CDRC (“Chairman”);
(ii) representative(s) of BNM;
(iii) representative(s) of the Securities Commission Malaysia;
(iv) representative(s) from the Ministry of Finance; and
(v) independent representative(s) appointed by BNM

This sort of statutory body will be transparent and clear in their objectives, without any fear or favour. Perhaps this could be an alternate way forward to solve the disgruntled shareholders group, creditors and management.

Mr. Mojo, I agree that the situation is less exciting now. However, I believe that they need to take some time to complete the RO requirements, make SOA improvements, and engage with creditors to negotiate. In addition, they must maintain the businesses with all the usual tasks, finding new businesses, and pursuing Borsig's listing and plans for uplifting from PN17. This is a significant list of tasks and a significant amount of work to accomplish.

Good morning everyone. Something that made you happy, I suppose, @Vhydro. I'm glad for you.😚

@StrategistInvestLam, yes, indeed. I am a student, almost done with my thesis on KNM as one of the case studies. The share price fluctuation and the series of news and rumours as "human perceptions" in relation to the share prices were amazing, not for the weak hearted people. Further, I was following all other counters, including Tunku Yaacob's group, and Tengku Kamariah's group, it's very interesting indeed.

Did anyone follow other indirectly related counters of KNM? MAA Group shares going up 35% to 47sen! wow, someone is really getting richer now... with the disposal of MAA's insurance arm in the Philippines for nearly RM234mil, they are a cash-rich company now.

@Strategistinvestlam, thanks for the input, truly appreciate it. Hope for the best then....

The court-appointed liquidators and the company should engage with its own independent liquidators to study and come up a report why EOT is better than outright liquidations. The company should consult BNM assistance too, as it involves vast numbers of stakeholders in bigger proportion.

In my personal opinion, engaging with the creditors of any class is the best option to move ahead, although the laws says you need 75%, it gives heavy weights if a consensus is reached. When the company is seeking EOT on repayments of debts with a guarantee of full settlements, while ensuring continuity in supply and business partnerships, I do not see a reason why they should reject it.

@Strategistinvestlam, thank you for the explanation. So, referring to the SOA that's been denied by the High court, has there been any revision done by Mr Ho team to improvise it, as well as the ES. I understand Mr Ho has experience in debt restructuring, wonder why it could fall short? By the way, is Sec382(2d) of CA2016, reference to a representative of creditors is fulfilled now?

@MrMojo, why would the German team help the company when their plans were rejected? Remember, bulk of his shares were from assignment contract. RM600mil issuance of new shares is crazy, placing bonds in European institutional markets currently not advisable unless someone doing a favour. Most other plans were revival of stalled projects like WTE London, FBM Hudson and ethanol Thailand projects, these take time more than 3yrs to produce revenue for the company.

@maxwin69, thanks for putting facts into perspective. It's already 2 red flags for 2 consecutive weeks. Left 1 more to go, the Borsig IPO.

Although we can read the articles and judgement, due to intervention of insiders, nevertheless, these shouldn't be overlooked as frivolous and they could be avoided. Not easy but doable.

@Maxwin69, thanks for the clarification, truly appreciate it. Of course, the middle east conflict may bring down several countries together, but keeping quiet logically speaking a bit selfish, and involving too much also gives trouble. In my personal opinion, I might be wrong, the interpretation I can envision Hamas and Tamil tigers in Sri Lanka sounds similar. A rebel group that started for good cause may have gone off track.

If most countries busy with the conflict, including China that sent its troops to suez canal region, and US sent their biggest ships, all neighbouring countries including Egypt and Syria armies at borders, its like a fire 🔥 and petrol ⛽️ next to each other... one misstep, H...A...B...I...S

@KWL, noted with thanks. I reckon so too. On the positive side, we know that Italian government considers Malaysia as a friendly nation.

Uplift from PN17, need to have 3Q +ve profits, and sustainable. When Airasia X submitted for PN17 uplift, kena shot down, Capital A boss said, jual 3 planes every qtr, can come out PN17. I think Bursa imposed additional terms now.

@Woodswater, if we have the magic ball, we would have bet on water companies, see how the share prices going up, all the big taikor buying up substantial shares into water service providers to take control, YTL, Sunway, etc... the moment our water tariffs going up soon.

In a financial distress situation where a loss-making subsidiary cannot be sold, options to raise funds might involve:

1. **Debt Restructuring:** Negotiate with creditors to restructure existing debt, extending repayment terms or adjusting interest rates.

2. **Equity Infusion:** Seek additional equity investment from existing or new investors to inject capital into the subsidiary.

3. **Asset Monetization:** Identify and sell non-core assets held by the subsidiary to generate cash.

4. **Cost Reduction:** Implement aggressive cost-cutting measures within the subsidiary to improve its financial performance and reduce losses.

5. **Government Assistance or Incentives:** Explore any government programs or incentives that could provide financial support to struggling businesses.

6. **Joint Ventures or Partnerships:** Form strategic alliances or joint ventures with other companies to share resources and financial burdens.

7. **Contract Restructuring:** Renegotiate contracts with suppliers or customers to improve cash flow and alleviate financial pressure.

It's crucial to assess each option carefully based on the specific circumstances, considering legal, financial, and operational implications. Seeking professional advice from financial experts or consultants can provide valuable insights tailored to the situation.

@Jonathan Keung, the company must device a backup plans by now. Liquidation isn't the only answer to it, using the concept of "blessings in disguise"...

#Woodswater, how to lelong FBM when the Italian government doesn't want to allow it to be sold? Hahaha 😆 if cannot sell, then can rent it out meh? It's like marriage cannot get divorce...😂🤣😃

Good morning, toll free on Saturday and Sunday for deepavali. Tuesday unrecorded leave for government servants celebrating deepavali.

It's coming to almost 1 month now since EGM, share price not breaking the floor rate 9sen. Investors are holding on to it. What are the backup arrangements to sustain at this price? 🤔 This company really gives goosebumps 😄

It's interesting development on rejection of FBM disposal to an UAE entity. The real reason of the rejection is not disclosed. Why ah?

This KNM has lots of surprises every turn it makes...

@KWL, yup, fundamentals are still good, but it got into trouble. Due to the company's rapid expansion without considering the implications it may have on its cash flow and external market environment.

The default of Thai bonds was observed to occur even 12 to 15 months prior to the occurrence, as evidenced by its business patterns. And of all the things, comes the Covid 19 pandemic, which has hit every person on this earth, one way or the other. The ethanol project has stalled for far too long, with no production, but the expense of simply maintaining it is high based on published financial reports. If liquidation word is taboo, then get another partner in, reduce your share, and get it to take off. Of course, you need more cash to do this. There is no other way else.

For every issuance of bond, there is a guarantor, between the bond buyers and issuer. The guarantor CGIS has paid the bond buyers as per published articles, but KNM didn't pay CGIS...hehehe.

The reason why we hear 2 different concepts (IPO or Disposal), based on their reports, they are doing both, see if Borsig can be sold at minimum Euro350mil or more under M&A concept, or IPO it. As the IPO date is coming closer, they are leaning towards IPO now.

So, the fundamental question arises with a saying, "why slaughter a golden eggs laying goose 🪿 when it can continue to lay golden eggs in the years to come?"

The below is another example of a case study we can learn from (for discussion purposes only, your own discretion is required as its your money)

On 31 December 2020, Sentoria Bina issued its explanatory statement ahead of the scheme meeting scheduled for 29 January 2021. This explanatory statement set out the proposal for the proposed scheme of arrangement.The financial aspects of the scheme were proposed with the guidance and advice of BDO and Ernst & Young. The proposed scheme was also formulated on their advice and that they too have taken the view that the scheme is more viable to Sentoria Bina and the creditors as opposed to liquidation.

The High Court in the case of Re Sentoria Bina Sdn Bhd (grounds of judgment dated 9 July 2021) dealt with scheme of arrangement issues. First, that a restraining order could extend to the corporate guarantor of the applicant’s company. Second, the case dealt with the principles for sanction of a scheme of arrangement.

The scheme was deemed speculative as contended by some of the interveners. The Court agreed that an intelligent and reasonable person would approve because:

1. Some of the interveners are not opposing the scheme. They are merely requesting that their debt be varied/increased, as SOA has significant variation, which the interveners showed proofs and the company verified at later stage.

The proposed scheme does not entail any reduction in the scheme debts. Merely an extension of time to pay the debts in full over 6 years.

There was BDO’s opinion (as the financial advisor of the scheme) that creditors are only expected to recover 11.5% of the sums in a liquidation of Sentoria Bina.

@maxwin69, hello there.. yes, agreed to your comments. Marketing dept does play pivotal role in boosting up the sales. In a capital intensive industry like KNM currently involves, there are several techniques to see this issue, one of them is formulation of good business terms with the customer, like upfront deposits, WIP pymts, shorter delivery time, efficient supply chain, improved productivity by by continuous orders with minimal gaps, etc, while opting for factoring facility to free up cash for more orders and service trade suppliers. Another option is (may sound inferior) partnering with another competing company jointly fulfill the orders. End of the day, any incremental sales closes the gaps between losses and breaking even. Positive mind is key.

KUALA LUMPUR (Sept 7): Cash-strapped Sapura Energy Bhd has secured a six-month extension to its standstill period from its multi-currency financing (MCF) financiers under the Corporate Debt Restructuring Committee (CDRC) regime, pushing the end-date to March 10, 2024.

“In line with Bank Negara Malaysia’s CDRC Participant’s Code of Conduct, the MCF financiers are to continue to observe the informal standstill and withhold all legal proceedings, and/or any other recovery action initiated or intended against Sapura Energy and/or the admitted group of companies,” the oil and gas services provider said in a bourse filing on Thursday.

It noted that the CDRC’s decision to extend the standstill period past the coming Sept 9 expiry date was in consideration of the current progress of the group’s proposed restructuring schemes.

The former Sept 9 standstill period end-date was a result of an extension it was granted by the CDRC back in February this year.

The Practice Note 17 outfit said the nine-month extension of the restraining orders it received from the court against its creditors back in June was also a factor in the CDRC’s decision. The restraining orders also end on March 10 next year.

According to the filing, the admitted group of companies are Sapura Energy, and its wholly-owned units Sapura TMC Sdn Bhd, Sapura Fabrication Sdn Bhd, Sapura Offshore Sdn Bhd, Sapura Subsea Services Sdn Bhd, Sapura Pinewell Sdn Bhd, Sapura Technology Solutions Sdn Bhd, Sapura Drilling Pte Ltd, Sapura Drilling Probadi Sdn Bhd and Sapura Petroleum Ventures Sdn Bhd.

The CDRC accepted Sapura Energy’s application to mediate in the group’s debt restructuring negotiations with its MCF financiers back in September last year.

It was previously reported that the group owes RM10.3 billion to nine lenders grouped under financiers of its MCF facilities, and an additional RM5.3 billion to vendors.

Shares in Sapura Energy closed unchanged at six sen, giving the group a market capitalisation of RM878.85 million.

The CA2016 amendments Bill 2023 may not be gazetted in time for KNM to apply in its situation which may lessen alot of hassles and money wastage.

KNM still commands a good fundamentals, it continues to have a steady stream of revenues. Its just the last mile achievement to close the gaps to break even, and with prudent control of costs of sales, and big push for big contracts to secure, and chop bleeding entities, KNM will be home to recovery.

There are experienced and calibre members in the board thats capable of bringing in fresh business deals to the table if it's fast forward sooner, will pacify grumpy parties among the stakeholders. So, the answer is fresh money! Liquidation isn't always the right and wholesome way to a financially distressed company.

Malaysia has tabled the long-awaited Companies Amendment Bill 2023. The Bill aims to usher in significant restructuring and insolvency changes like cross-class cramdown, pre-packs, and super priority rescue financing. The 9 significant key reforms:

1. The wider restraining order moratorium.
2. Cross-class cramdown in schemes of arrangement.
3. Pre-pack schemes of arrangement.
4. Improvements to scheme procedure.
5. The greater role of the court-appointed insolvency practitioner in schemes of arrangement.
6. Super priority rescue financing for schemes and judicial management (JM).
7. CVA for more companies (including listed companies).
8. JM for more companies (including listed companies) and the Court decides on the period of extension of the JM order.
9. Protection for essential goods and services for insolvency related events.

Hari ini MacD cuti kah? Tadak bunyi ini hari...

@Auntylee, betul betul betul, live and let live... repot2 tausah lar...

@batigoal, in due time, so many things have happened to the company in the past less than 3 months and the board has been busy putting off the fires, they need to get the team back to work, back to basics, get good contracts in, boost up revenues.

@YusufM, let's have our list too...

Anyhow, I truly believe the rights of one's own expression should prevail, so, MacDee34 deserves to voice "its" opinions just like everyone else here, as long as the respect, non-religious, any sensitive issues are avoided at all times.

Good morning guys...wow, looks so quiet, everyone tired of commenting I guess.

@Plantermen, you are indeed correct, it's not a good sign when an application of any sort is duly rejected by the courts of any nature, in KNM case, its RO and SOA. Nevertheless, KNM has been having difficulties in the past 36 months or more, based on its historically published data. If any creditor is filing a suit, it can happen anytime prior to that. Suppliers are business people too, perhaps, they will impose even stricter credit terms if they want to do business with the company. The company needs to revive itself from its cash flow issue first, but by taking a lot of internal controls to keep costs down and find fresh money with new businesses injected into the company, that's the only way to go up. Miracles in O&G service sector don't happen, except if you are drilling for oil, perhaps yes.... or unless the government bails the company out due to national interests.

@KWL, if you have a lawyer friend who will have access to the high court judgements portal, I am sure he has access to their portal. Give him the case reference number to retrieve the judgement. Or go to www.elaw.my but its EXPENSIVE to enroll unless you are studying or practising law.

@SelenaYeoh, join the club, can get free McD vouchers for value meals... 😅😂🤣 or French fries 🍟 🤔 😋