KUALA LUMPUR (Oct 27): KNM Group Bhd (KL:KNM) is choosing financial stability over its listing status, as it plans to proceed with its €270 million (RM1.34 billion) sale of Deutsche KNM GmbH (DKNM), which it says is "critical" to stabilising its finances, and in the process withdraw its appeal against its looming delisting by Bursa Malaysia.

In a filing on Monday, the debt-laden company's board said it had withdrawn its appeal against Bursa’s rejection of its Practice Note 17 (PN17) regularisation plan, which the regulator said earlier this month had failed to prove long-term business sustainability. 

The withdrawal of its appeal will see KNM delisted on Nov 5, 2025, after spending 22 years as a listed company.

KNM said the withdrawal was necessary as the timeframe of regulatory processes involved in pursuing the appeal could potentially affect the completion of the sale of DKNM.

KNM described the delisting as a strategic move to accelerate its turnaround and complete the disposal of DKNM to Japan’s NGK Insulators Ltd for €270 million, which it said was the “highest and most credible offer received". 

"KNM has endured some of its toughest years and is now on the verge of transformation. If delisting is what it takes to complete the NGK sale, eliminate debt, and restore growth — it is a necessary step forward," KNM group chief executive officer Ravindrasingham Balasingham said in a separate statement. 

The company noted that the current trading price of its shares already reflects “minimal value”, making the impact of delisting largely symbolic, and that remaining listed under PN17 does not support any fundraising actions while harming its image with clients and investors.

KNM added that delisting allows it “to move faster, execute projects more effectively, and focus on restoring profitability without any delays”.

KNM’s decision came after Bursa warned major shareholder MAA Group Bhd (KL:MAA) on Oct 23 that holding a shareholder vote on the sale would breach listing rules. MAA had planned an EGM on Oct 30, after KNM rejected MAA’s request to call for one, saying it could not be done in compliance with Bursa’s rules. 

MAA, which owns 19.37% of KNM, said the sale to Japan’s NGK Insulators Ltd must be completed by Oct 30 to avoid liquidation.

As it proceeds towards delisting, KNM said it will go ahead with the EGM on Oct 30 to seek shareholder approval for the disposal. The transaction is expected to strengthen KNM’s balance sheet by reducing RM1.3 billion in debt and securing RM100 million in cash to revitalise operations and support its turnaround. 

"KNM currently has nearly 33,000 shareholders and around 450 creditors, both of whom stand to benefit from the completion of the DKNM disposal. The upcoming EGM on Oct 30, 2025 is therefore a crucial milestone in ensuring KNM’s recovery and financial sustainability," it said in the statement. 

KNM, in its filing with the bourse, said completing the sale of DKNM, which owns its key asset Borsig GmbH, is critical to settling debts and reducing gearing. Creditors have allowed KNM to keep RM100 million from the sale proceeds as working capital for its Malaysian operations.

The company stressed that delisting does not mean closure, as KNM will continue operating as an unlisted public company, with all shareholder rights protected under the Companies Act 2016.

KNM said it will focus on a financial and operational turnaround using the retained funds and may consider re-listing once its finances improve.

“The board is fully committed to the turnaround of KNM Group and believes this decisive action, while difficult, is the only responsible path to protect the company and create future value for its stakeholders,” the company said.

 The company entered PN17 status in October 2022 after auditors raised going-concern issues.

Before suspension, KNM’s shares last traded at 0.5 sen, valuing the company at RM20.23 million.

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