KUALA LUMPUR (April 29): Civil engineering and construction specialist WZ Satu Bhd will be venturing into the higher-margin moneylending business, with its executive chairman and president Tan Sri Mohamad Norza Zakaria injecting his second private company into the group.

This comes after WZ Satu entered into a conditional share purchase agreement on Friday (April 29) with TIZA Global Sdn Bhd (formerly known as Citaglobal Sdn Bhd) for the proposed acquisition of Citaglobal Hospitality Sdn Bhd (CHSB) for a cash consideration of RM1.5 million.

Upon completion of the acquisition, which is expected within the next two months, CHSB will become a wholly-owned subsidiary of WZ Satu.

According to WZ Satu, CHSB has a moneylender’s licence issued by the Ministry of Housing and Local Government, valid until Feb 10, 2024. To date, the company has yet to commence its moneylending business, thereby eliminating any legacy issues upon acquisition by WZ Satu.

In a statement on Friday, Mohamad Norza highlighted that with the moneylending business as a new income stream, WZ Satu is expected to further turbo-boost its profitability growth moving forward.

“We plan to put the moneylending business on-stream as soon as the acquisition is completed. We see a huge growth opportunity for the group in this segment, especially with the expected hike in the Overnight Policy Rate (OPR) in the second half of 2022,” he said.

“The acquisition of CHSB would contribute positively to WZ Satu after considering the relatively longer processing periods and stricter lending requirements imposed by banks and licensed financial institutions,” Mohamad Norza elaborated.

WZ Satu pointed out that the acquisition of CHSB also provides a more time-saving and cost-effective way to obtain the moneylending licence compared to the group applying for a moneylending licence on its own.

Moreover, WZ Satu believes the diversification, which is timely in tandem with Malaysians’ rising appetite for borrowings, allows the group to focus on the under-served and under-tapped markets, as well as bring synergy effects to the group’s existing businesses — including the proposed venture into property development.

Mohamad Norza noted it also takes into account the demand for financing from individuals and businesses from licensed moneylenders for various reasons such as personal financing, business start-up and expansion, vehicle and equipment financing and purchase of properties.

“Besides, the acquisition also considers the current economic situation and lending market outlook in Malaysia,” he added.

It is worth noting that CHSB is the second asset to be acquired from TIZA Global, a private vehicle of WZ Satu’s Mohamad Norza.

In November last year, WZ Satu proposed to acquire the entire stake in engineering consultancy services and construction related services firm Citaglobal Engineering Services Sdn Bhd (CESSB) from TIZA Global for RM140 million. The acquisition of CESSB will be completed in the near-term.

In a separate filing with Bursa Malaysia on Friday, WZ Satu announced that a virtual extraordinary general meeting (EGM) will be held on May 31, 2022 for shareholders to vote on two resolutions, pertaining to the group’s diversification into property development and its proposed change of name.

WZ Satu’s share price finished 5% or one sen higher at 21 sen, bringing it a market capitalisation of RM227.78 million.