PETALING JAYA: The Italian government has thrown a spanner into KNM Bhd’s plan for its subsidiary to dispose its entire stake in FBM Hudson Italiana SpA (FBM Hudson) in a bid to reduce the group’s massive debt.
In a Bursa Malaysia filing today, KNM said the Italian government has rejected the proposed disposal by its wholly owned subsidiary KNM Europa BV of its stake in FBM Hudson to United Arab Emirates’ Petro MAT FZCO.
The stake disposal for €22 million (RM111.76 million) was announced by KNM, a Practice Note 17 (PN17) status company, in early September.
KNM said the buyer had failed to obtain the “golden power clearance” from the Italian government. This refers to its special power to stop any foreign direct investment, or halt corporate transactions involving strategic assets. Such assets include defence, national security, and infrastructure such as transportation, energy, and communications.
The generated funds (€22 million) from the proposed sale were earmarked to settle the outstanding debts of KNM and its subsidiary, KNM Process Systems Sdn Bhd, totalling over RM1 billion.
This came as part of the company’s announced scheme of arrangements on Dec 16, 2022.
FBM Hudson had reported a net asset value of €40.64 million (RM205.94 million) as of June 30, 2023.
“Presently, the management of KNM is reviewing and discussing with all the parties concerned for the steps moving forward,” KNM said in its filing.
“Further development in relation to the proposed disposal will be announced in due course,” it added.
FBM Hudson is primarily involved in the design and manufacture of heat exchangers and high-pressure equipment for oil and gas, oil refining, petrochemicals, chemicals, power and fertiliser businesses.
KNM’s shares were unchanged at 9 sen, valuing it at RM364.13 million.
