The company said in a statement that a key component of the plan is to sell Deutsche KNM GmbH (DKNM) for €270 million (around RM1.3 billion).

The plan also seeks to reduce and consolidate its shares from 4.05 billion to 1.01 billion to erase accumulated losses.

Once implemented, KNM said it expects to have almost no debt, retained reserves of RM240 million, and a net asset base of RM284 million, up from RM273 million previously.

The company said the regularisation plan would go hand in hand with a creditor-approved scheme of arrangement to recover RM1.188 billion in debt and waive RM320 million in interest and penalties.

An additional RM100 million loan from existing creditors, along with RM204 million in bonds, will provide working capital and cover the remaining debt, it added.

KNM slipped into PN17 status in October 2022 after its external auditor highlighted material uncertainties over the company’s ability to continue as a going concern.

Chairman Tunku Yaacob Khyra said the plan strengthens KNM’s foundation and positions the company for a sustainable future.

CEO Ravindrasingham Balasingham added that completing the sale of DKNM and the regularisation plan will be crucial for the turnaround, with working capital helping to restart operations.

“With the continued support of both our creditors and shareholders, we are confident in delivering a successful turnaround that restores KNM to sustainable profitability and long-term growth,” he said.

“The RM100 million in working capital is critical to reigniting our operations, while shareholder approval at the upcoming emergency general meeting for the disposal of DKNM and the regularisation plan will be pivotal to completing the scheme of agreement.” he said.