THE GERMAN BILLIONAIRE BEHIND KNM HOSTILE TAKEOVER
The Mastermind
From earlier reports we know that Flavio Porro is the culprit behind KNM's recent hostile takeover bid and Andreas Heeschen is his friend who is supposed to finance the takeover project. Their ultimate objective is to take possession of KNM's prized subsidiary, Borsig GmbH. Borsig is based in Germany, the home of Andreas Heeschen who knows how valuable Borsig is. Lately Borsig's value has shot up due to having 250 million euros in back orders to be fulfilled. Among these orders are the supply of equipment for Elon Musk's Starlink space project. With such a sterling performance Borsig is now slated to be listed in the Singapore Stock Exchange, SGX. The authorities in Singapore have welcomed the listing of the company on SGX and has offered grants to offset the listing costs. Investment bankers will be doing a roadshow for the listing. The date of the roadshow is confirmed to be in October 2023. The expected debut date is on June 2024, pending the finalisation of accounts for financial year ending 31 December 2023 and perfection of other documents related to the said listing.
Furthermore, Borsig is the only business currently making money for KNM. The other two profitable companies earlier are FBM Hudson based in Italy and Impress Ethanol in Thailand. Due to various reasons these businesses have been making losses for the past few years. FBM was facing high labor costs and does not command premium branding like Borsig. Furthermore its Korean and Chinese competitors are using government subsidised steel for their operations. In Thailand, the price of cassava went from $2 per tonne to almost $7 per tonne as the Chinese government started their stockpiling program. KNM's Impress Ethanol plant there thus became unprofitable.
Flavio is the ex-director at KNM, a high ranking management staff at KNM who held the post of CEO of FBM Hudson and managing director of Borsig up till December 2022 where the current management team took over and replaced him due to KNM's decline and classification under the PN17 distressed company status under his watch. He is currently under investigation for wrongdoing during his tenure at KNM.
Who is Andreas Heeschen?
Flavio planned the Borsig takeover and he needed someone to finance it. His buddy for the purpose is Andreas Heeschen, supposedly a German billionaire who is involved in firearms manufacturing, under his Heckler & Koch company where he was the major shareholder. The company has been sanctioned in Europe especially the UK, where they were involved in the sale of illegal firearms.
Heckler & Koch bribed Angela Merckle's political party more than ten years ago when she was prime minister. Only now they managed to put together proof of the incident and the senior employees of the company are now on trial in Stuttgart for their crime.
So this is Andreas Heeschen; a bad guy and a crook who will not hesitate to strip our Malaysian company of its prized asset and sell it to the highest bidder, should he be successful in taking over the company and putting it under receivership. Of course he will have to first satisfy the creditors and bankers, but the smaller creditors will not be paid. Shareholders will suffer big losses as the share price plummet.
In short, Andreas is just targeting Borsig, to acquire it at a low price and then flip it for a huge profit.
He has tried to wrest away Borsig where Flavio offered to sell it to him earlier. But he was not able to show proof of funds and gave excuses trying to bargain for a lower price. He was probably having some cash flow problems in his backyard at Heckler & Koch due to sanctions and investigations resulting in greatly diminished sales of firearms.
Moving KNM forward
KNM has just renewed their restraining order (RO) for the bankers, and the current management would have to spell out the plans specifically for KNM's revival via a court-convened scheme of arrangement (SOA) meeting on 12/10/2023. The Chairman Tunku Yaacob will propose to repay all creditors, both secured and unsecured, their debt in full without any haircut. It is normal for distressed borrowers to ask for haircut of 30, 50 or even 70%. In the case of AAX it was 95% haircut.
https://theedgemalaysia.com/article/airasia-x-creditors-take-steep-haircut-debt-restructuring-scheme
Tunku will explain in detail during the upcoming SOA, complete with figures, how this exercise will be done which is by listing Borsig on SGX and selling off three loss-making subsidiaries.
The current management are fighting for dear life to save KNM. At the same time, they have to fend off an irresponsible hostile takeover bid from the Italian/German pair (purportedly with the help of local syndicate and stock market manipulator boss Alex Teh) which will result in the collapse of the company, because the Italian/German guys have so far not come out with any plan to save KNM.
The timing is very tight and challenging for the current management team because the EGM to oust them is scheduled on 16/10/2023, just a few days from the SOA.
It is one fierce battle to watch. We hope patriotism will save the day and prevent our Malaysian company from falling into foreign hands. It will also be a first in the sense that nobody has tried to do a hostile takeover on a PN17 company before. Like they say, "ada udang di sebalik batu," and the tasty udang is Borsig.
Comments
Post a Comment