KUALA LUMPUR: Diversified process equipment manufacturer KNM Group Bhd expects 70 per cent of its revenue to come from renewable energy, beginning next year.
Its renewable energy business will be derived mostly from its Thailand unit — Impress Ethanol Co Ltd (IEL) — of which KNM Group is a majority shareholder with a 72 per cent stake.
“We have mostly been a contract player for all our business segments since our establishment in 2003,” said group chief executive officer Lee Swee Eng yesterday.
“By having a recurring source of income from our renewable energy business, we will be able to achieve stability in our income stream, rather than be impacted by economic cycles,” he added.
KNM was once a darling stock in the local bourse. The last eight years, however, have seen the company undergoing a restructuring exercise. This included strengthening its balance sheet, disposing of loss-making units and diversifying into the business of developing and producing renewable energy to smoothen its revenue and earnings stream.
Lee said IEL was expected to be fully operational by early next year.
“Within five years, we expect 70 per cent of our income to come from the renewable energy unit in Thailand, as well as some parts of the United Kingdom,” said Lee.
The group yesterday sealed a guarantee facility for the issuance of 2.78 billion baht (RM330.3 million) bond programme with the Credit Guarantee and Investment Facility.
Proceeds from the Thai bonds will be utilised for refinancing IEL debts, future expansion, working capital and other expenses for bio-ethanol plants.
“We are planning to be in Thailand for the long term. In fact, we are also looking to expand in Thailand,” said Lee.
United Overseas Bank (Malaysia) Bhd is the principal adviser, while United Overseas Bank (Thai) Public Co Ltd is the lead manager and bookrunner for the proposed Thai bond.
The first tranche of the 2.78 billion baht plan is expected to be issued by the end of the year.
Meanwhile, Lee said, the company have had minor impacts from the depreciation of the ringgit for the past two years.
The group, which is listed on Bursa Malaysia’s Main Market, currently operates in 10 countries.