Borsig IPO to alleviate KNM’s financial woes

PETALING JAYA: The initial public offering (IPO) exercise of machinery and equipment unit Borsig GmbH on the Singapore Exchange (SGX) should uplift KNM Group Bhd by aiding its repayments to creditors, says Borsig chief executive officer (CEO) Jurgen Stegger.

In a statement yesterday, he highlighted that Borsig has continued to shine as a valuable asset within the KNM Group, with an attractive market valuation exceeding �300mil (RM1.5bil), which itself far exceeded the parent group’s own market capitalisation of RM445mil.

Reporting that KNM Group CEO and managing director Ravindrasingham Balasingham had highlighted the undervaluation of the conglomerate’s shares and referred to Borsig as a prime asset deserving of recognition, Stegger said recent developments surrounding KNM Group have brought renewed attention to Borsig’s significance.

“With an eye on maximising the value of Borsig, KNM Group is now looking toward an IPO on the SGX for Borsig.

“This strategic move aims to unlock the full potential of Borsig, offering it an opportunity to thrive in the market while aiding KNM Group in its debt-repayment efforts.

“If the upcoming EGM on Oct 16 results in favour of the current management of KNM, it has the potential to not only enhance the value of Borsig through its IPO but also uplift the entire KNM Group,” he commented.

Stegger said Borsig has been recognised as the most valuable asset within KNM Group, with the parent currently grappling with significant financial losses that have been accrued, compiled and consolidated that have been passed on to the current management team.

As a result, he reiterated the management’s decision to monetise Borsig, fully or partially, either to new ownership or by letting it go public on the stock exchange, the latter being the route which has been selected.

Commending the current management team for its contingency plans and maintaining optimism for the way forward, Stegger said the IPO track will enable Borsig to achieve significant growth in the future, both through organic expansion and, especially, through external development.

“We will have the ability to augment our product portfolio and acquire companies to expand our business.

“This represents a fantastic opportunity for Borsig, and the IPO phase is the perfect avenue for our growth,” he said.

On top of that, he said the IPO will also improve Borsig’s footprint in Asia.

This was as the company was planning to expand its business further in the continent by establishing local and regional engineering or production partnerships or facilities.