The company’s wholly-owned German unit, machinery and equipment producer Borsig GmbH, broke its month-long silence today to throw its lot behind current chairman Tunku Yaacob Khyra and his team.
In a statement issued early today, Borsig CEO Jurgen Stegger commended the Negeri Sembilan prince for his guidance.
“If the results (of Monday’s EGM) favour the current management, it has the potential to enhance the value of Borsig through its initial public offering (IPO) track and uplift KNM,” he said.
Stegger said that Borsig, which is seeking a listing on the Singapore Stock Exchange (SGX), acknowledged KNM’s current situation and the discussions surrounding his company, and emphasised “the importance of avoiding past challenges to make the IPO path the way forward”.
The current management of KNM is looking to have a pre-IPO placement for Borsig by end-2023 and an IPO in the second half of 2024.
A group led by Johor princess Tunku Kamariah Sultan Iskandar is leading a charge to replace Tunku Yaacob and the entire board of KNM with a new line-up.
The fate of both royals now hinges on the outcome of an EGM that has been scheduled for next Monday.
Stegger said the IPO would enable Borsig to achieve significant growth in the future, both through organic expansion and through external development.
“We plan to expand our business further in Asia by establishing local and regional engineering or production partnerships or facilities,” he said in the statement.
“(However) it’s not just about growth, it’s also about improving our footprint in Asia. (Through) this strategic move (we) aim to unlock the full potential of Borsig, offering it an opportunity to thrive in the market while aiding KNM in its debt repayment efforts,” Stegger added.
However, Tunku Kamariah has expressed doubt that the listing of Borsig on SGX would be realised as, she claims, a certain percentage of its revenue is derived from a country sanctioned by the Singapore government.
Furthermore, she said, pursuing the listing of Borsig could potentially lead to the delisting of KNM as more than 75% of its revenue is currently derived from the subsidiary.
The notice of requisition for an EGM to oust the sitting board of directors was led by German tycoon Andreas Heeschen with the support of eight other shareholders.
While Heeschen holds a 7.91% interest in KNM, making him a substantial shareholder, the others collectively have only a 2.77% stake, giving them a cumulative 10.68% control of the company.
The plan is to have Tunku Kamariah replace Tunku Yaacob as chairman while Heeschen is to take the place of Zulhasnan Rafique on the board. Among several others who have been named as potential directors in the new board is former executive director Flavio Porro.
Tunku Kamariah received a boost herself yesterday from Sarawak businessman Mahmud Abu Bekir Taib. Mahmud accumulated a 5.03% stake in KNM just yesterday to make himself a substantial shareholder.
Tunku Kamariah has described him as her “favourite businessman”.
In her statement yesterday, Tunku Kamariah also expressed confidence in the ability of the individuals she has handpicked for the board.
She stressed that they were competent and had the ability to help KNM navigate its way out of Practice Note 17 (PN17) status. Over and above that, she also outlined her vision for the company for the next five years.
This includes injecting new capital, acquiring new assets to increase Borsig’s current capacity, substantial investments in new projects, cooperating with inter-governmental bodies and securing new long-term contracts.
“We have the local and European resources to assist KNM to settle debt repayment. Possibly, a migration of debt of about €160 million via bridging loan and special issuance of bond and we have the resources to raise capital of around RM400 million via appropriate corporate exercise,” her statement read.
Additionally she also criticised certain parties for, she claimed, their “irresponsible statements” of pricing/valuation of KNM at 40 sen, asserting that it doesn’t align with the company’s net tangible assets of 21 sen as reported.
“Such remarks were speculations, an attempt to influence investors,” Tunku Kamariah said.
Borsig was acquired by KNM, an oil and gas equipment manufacturer, for €350 million in 2008.
At the time of writing, KNM’s share price was up half-a-sen or 4.17% at 12 sen with a market capitalisation of RM523.80 million.