KNM proposes 10% private placement to raise RM53m for debt repayment, working capital
KUALA LUMPUR (Nov 22): KNM Group Bhd has proposed a private placement of 10% of its share capital to raise up to RM53.46 million, nearly five months after its private placement of 30% share capital was rejected by shareholders in June.
KNM has proposed the placement mainly to pare its debt (RM30 million) and working capital (RM22.16 million), according to its filing.
The company has proposed to place 334.13 million new shares at an indicative price of 16 sen apiece. It has an issued share capital of RM2.02 billion comprising 3.34 billion shares, as well as 149.63 million outstanding ESOS schemes.
KNM recently announced a non-payment event involving 2.78 billion Thai baht (RM352.57 million) with coupon payment of approximately 42.04 million Thai baht (RM5.42 million).
It has a grace period until Dec 2 to pay the principal sum, and until Dec 9 to pay the coupon before an event of default occurs.
"The group intends to allocate RM5.4 million as full payment of the coupon of the Thai bonds for the period from May to November 2021, which was due on Nov 18, 2021," it said in its latest filing.
"The payment of the outstanding coupon payment is an interim measure undertaken by KNM to resolve the non-payment event," it said.
"After due consideration of the various methods of fundraising, the board opines that the proposed private placement is the most appropriate avenue of fundraising as the proposed private placement enables the company to raise funds expeditiously without incurring interest costs as compared to conventional bank borrowings thereby minimising any potential cash outflow in respect of interest servicing costs," it added.
On June 29, KNM shareholders rejected its proposed private placement of up to 987.52 million new shares or 30% of its issued share capital to raise RM167.9 million.
KNM had planned to utilise RM120 million from the proceeds to pay its debt, and another RM44.08 million was earmarked for working capital.
At end-June, KNM had total borrowings of RM1.33 billion, of which some RM711.68 million was short-term liabilities. Its cash balance stood at RM256.47 million.
Shares of KNM settled down half a sen or 2.94% to 16.5 sen, giving it a market capitalisation of RM551.62 million.