1.     Introduction

KNM Group Berhad (“KNM”) is pleased to announce that its wholly-owned subsidiary, KNM Process Systems Sdn Bhd (“KNMPS”), has on 28.09.2021 signed a contract with PEC Powercon Sdn Bhd for the Pre-Fabrication Tank for Combined Cycle Power Generating Facility of up to 1,200mw at Pulau Indah, Selangor , amounting to approximately RM13.4 million  (“Transaction”).

The supply and delivery duration of the Transaction is for a period of approximately 11 months from the date of the contract.

2.     Information About the Parties

KNMPS was incorporated as a private limited company under the law of Malaysia on 28 June 1990 and it 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 specialized 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 inclusive of solar PV installation work and solar leasing.

PEC Powercon Sdn Bhd was incorporated as a private limited company under the law of Malaysia on 18 February 2020 and principally involve in construction of building n.e.c.   

3.     Financial Effect of the Transaction

The Transaction is 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 Transaction is 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 Transaction is 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 Transaction, the Board of Directors is of the opinion that the Transaction is 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 Transaction.

8.     Documents for Inspection

Details of the Transaction 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 date of this Announcement during normal business hours from Mondays to Fridays.

This announcement is dated 28 September 2021.