1.     Introduction

KNM Group Berhad (“KNM”) is pleased to announce that its indirect wholly-owned subsidiary, FBM Hudson Italiana SpA (“FBM”), has entered into two agreements dated 25 January 2021 with STAMICARBON B.V. for the supply of a High Pressure Carbamate Condenser and a High Pressure Stripper for plant in USA, for a total contract values of EURO 6.14 million (equivalent to approximately RM30.22 million based on the exchange rate of EURO1.00 : RM4.92275.) (“Transactions”).

The supply and delivery duration of the Transactions are for a period of approximately 14 months from the date of the agreements.

2.     Information About the Parties

FBM was incorporated as a private limited company under the laws of Italy on 27 October 1992. FBM is principally involved in the design, engineering, procurement and manufacturing of process equipment, including without limitation pressure vessels, reactors, columns and towers, drums, heat exchangers, air finned coolers, process gas waste heat boilers and specialised shell and tube heat exchangers, condensers, spheres, process tanks, mounded bullets, process skid packages and turnkey storage facilities as well as technical and project management services in relation to process equipment, plant facilities and general facilities for the oil, gas, petrochemicals, minerals processing and renewable energy industries worldwide.

STAMICARBON B.V. was incorporated in Netherland and involves in the Oil and Gas industries.  

3.     Financial Effect of the Transaction

The Transactions are expected to contribute positively to KNM Group’s earnings for the financial year ending 31 December 2021 and 31 December 2022.

4.     Risk Factors

The Transactions are subject to certain commercial and financial risks mainly in the power, oil, gas, petrochemical, and energy industries. These include changes in general economic conditions such as, but not limited to inflation, environmental, health and safety regulations, taxation, foreign exchanges, interest rates, labour and material supply, changes in business and operating conditions such as, but not limited to government and statutory regulations and deterioration in prevailing market conditions.

KNM is already operating in these industries and hence would continue to be exposed to risk factors that they currently face whilst operating in these industries.

Although KNM with its vast experience may undertake efforts to mitigate the various risk factors, there is no assurance that any change in the above risk factors will not have a material adverse effect on the business and operations of KNM.

5.     Approvals

The Transactions are not subject to the approval of the shareholders of KNM or any regulatory authority in Malaysia or in any other country.

6.     Directors' Statement

Having considered all aspects of the Transactions, the Board of Directors is of the opinion that the Transactions are in the best interest of KNM.

7.     Directors' and Major Shareholders' Interest

None of the directors and/or major shareholders of KNM, and/or any persons connected with them, have any direct or indirect interest in the Transactions.

8.     Documents for Inspection

Details of the Transactions are available for inspection at the registered office of KNM at 15 Jalan Dagang SB 4/1, Taman Sungai Besi Indah, 43300 Seri Kembangan, Selangor Darul Ehsan, Malaysia for three (3) months from the date of this Announcement during normal business hours from Mondays to Fridays.

This announcement is dated 25 January 2021.