KUALA LUMPUR (May 10): MAA Group Bhd (KL:MAA) has acquired an additional 201.48 million shares, or a 4.98% stake, in troubled Practice Note 17 (PN17) company KNM Group Bhd (KL:KNM) for RM33.24 million, or an average price 16.5 sen per share.
The shares were bought between February 8 and May 10, 2024, KNM said.
The acquisition has raised MAA’s direct and indirect stake in KNM to 13.54%, its filing showed. The 4.98% stake was bought via a direct business transaction, MAA said.
“The purpose of the investment is to increase MAA’s ownership interest in KNM, which in turn provides an opportunity for MAA to participate in any future potential capital appreciation in the value of its investment in KNM,” MAA said.
KNM shares last traded unchanged at seven sen, giving it a market capitalisation of RM283.21 million. Shares of MAA settled down half a sen or 1.28% to close at 38.5 sen, giving it a market capitalisation of RM100.27 million.
KNM is currently in the midst of seeking approval from Bursa Securities to extend its regularisation plan submission deadline up until April 30, 2025. The latest deadline has been set at April 30 this year.
MAA, controlled by Tunku Datuk Yaacob Khyra, emerged as KNM’s substantial shareholder in September 2021, citing the energy infrastructure industry upcycle and raising plans to address the latter’s overgeared position by disposing of certain subsidiaries.
KNM, however, fell into PN17 status in October 2022 as its crash crunch worsened and initial plans for a RM1 billion disposal of its German-based machinery and equipment unit Borsig GmbH failed to take off.
With Borsig’s value in the spotlight, KNM was also caught in a board tussle between Yaacob and another substantial shareholder Andreas Heeschen last year.
Heeschen and parties acting in concert were unsuccessful in removing Yaacob as chairman, eventually paring his stake in KNM to 6.42% from 8.25% at its peak in October 2023.
As KNM continues to search for a good deal for its businesses for sale, MAA has been extending loans to the company, the latest being RM13.5 million for working capital purposes.
At seven sen per share, MAA’s deemed interest in KNM is valued at around RM38.32 million, compared with its acquisition costs of RM115.51 million or an average of 21 sen per share, based on information compiled from MAA’s filings and annual report.
KNM’s net book value at end-December stood at 16 sen per share, its filing showed.
Another acquisition by MAA conducted around the same time — involving shares in property outfit Turiya Bhd (KL:TURIYA) — has been profitable.
In 2021, MAA bought a 58% stake in Turiya for RM23.79 million or 18 sen per share.
MAA had initially planned to take Turiya private, but ownership of the shares acquired by MAA was challenged by Turiya’s former controlling shareholder Tan Sri Mohan MK Swami.
Subsequently, the two parties settled and MAA sold the stake for RM52.86 million or 40 sen per share this year to Swami-linked Empire Holdings Ltd.