October 9, 2008

KNM Eyes Deals Worth US$60m From Joint Venture

By Goh Thean Eu

KNM Group Bhd, an oil and gas process equipment maker, expects to secure contracts worth up to US$60 million (RM209.4 million) over the next six months through its joint venture with French Prosenat SA.

The joint-venture company KPN Gas Technology Sdn Bhd, which both KNM and Prosenat hold equal stakes, offers a full range of gas treatment processing services.

"We are bidding not only for the Southeast Asian market, but also the Middle Eastern and Oceania markets. Realistically, we hope to secure US$50 million (RM174.5 million) to US$60 million (RM209.4 million) worth of projects. Of course, the total projects (we bid for) are worth a lot more bigger," KNM group managing director Lee Swee Eng said in Seri Kembangan yesterday.

KPN Gas Technology aims to be the top four gas treatment processing players in Southeast Asia within two years.

"Prosenat's technology is strong and well-received all over the world. We are confident that the same thing can be repeated here," he said.

Currently, Prosenat is one of the top four players in Europe. It does not have a presence in the Southeast Asian region.

Lee said by teaming up with each other, Prosenat is able to expand its presence into the region, while KNM is able to offer more gas treatment processing services to its customers.

KPN Gas Technology is expected to generate about US$10 million (RM34.9 million) in revenue over the next 12 months, and about US$30 million-US$50 million (RM104.7 million-RM174.5 million) by the end of its second year in business.

KPN Gas Technology's chief executive officer and chief technology officer positions will be held by Prosenat's representatives, while the other key positions will be held by KNM representatives. KPN Gas Technology will also use KNM's manufacturing facility.

Meanwhile, KNM said it expects to receive a reply from Malayan Banking Bhd (Maybank) soon on its request to refinance its Euro150 million (RM717 million) loan.

Overseas banks have offered KNM a loan in euros with an interest rate of about five per cent and the company is negotiating for a similar rate with Maybank.

KNM is trying to refinance a bridging loan that will help pay for its Euro350 million (RM1.69 billion) takeover of Germany's Borsig GmbH in June.

(c) 2008 New Straits Times. Provided by ProQuest LLC. All rights Reserved.