MBSB Bank demands to auction KNM’s land in Kuantan over RM116m debt

• MBSB Bank filed the summons to obtain an order for sale via public auction, citing the failure of KNM Process Systems to settle the outstanding amount of RM116.13 million as of Jan 31, 2025.

KUALA LUMPUR (March 25): Oil and services firm KNM Group Bhd (KL:KNM), whose share price has been trading at its lowest over the last two weeks, said its indirect wholly-owned subsidiary is being sued by MBSB Bank Bhd for allegedly defaulting on a RM116.13 million Islamic financing facility.

Perwira Awan Sdn Bhd, a subsidiary of KNM Process Systems Sdn Bhd, has been served with the originating summons, where MBSB Bank is seeking a court order to auction off its land in Kuantan, Pahang, according to the Practice Note 17 (PN17) company’s filing on Tuesday.

MBSB Bank filed the summons to obtain an order for sale via public auction, citing the failure of KNM Process Systems to settle the outstanding amount of RM116.13 million as of Jan 31, 2025.

“The company is seeking legal advice on the matter and will decide on the next course of action in respect of the OS (originating summons),” KNM said.

The hearing for the case is scheduled for April 15. Further updates on the legal proceedings will be announced in due course, KNM added.

KNM recently announced that the company has secured a court order to convene a creditors meeting in regards to its restructuring plan aimed at financial recovery.

However, the court denied a restraining order (RO) that would shield KNM from legal action during the restructuring. KNM said that it plans to seek an extension of the RO.

Last month, the group announced a new €270 million (RM1.26 billion) deal to sell its German unit Deutsche KNM GmbH to Japanese-based ceramic company NGK Insulators Ltd.

Additionally, the company said that it is also seeking buyers for its loss-making Italian subsidiary, FBM Hudson Italiana SpA, following a third failed attempt.

KNM finished half a sen or 11.11% lower at four sen on Tuesday, valuing the company at RM161.84 million. Over the past year, the counter has lost 50%.

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