KUALA LUMPUR (Oct 6): Shareholders of Citaglobal Bhd (formerly known as WZ Satu Bhd) on Thursday (Oct 6) voted to approve Citaglobal’s proposed acquisition of the entire equity interest in Citaglobal Engineering Services Sdn Bhd (CESSB) for RM140 million, via the issuance of 736.84 million new shares at an issue price of 19 sen each.
This was after Citaglobal in June this year announced that it has entered into a share purchase agreement with TIZA Global Sdn Bhd (formerly known as Citaglobal Sdn Bhd) for the proposed acquisition of the entire equity interest in CESSB.
Additionally, its shareholders approved the proposed consolidation of every five existing Citaglobal’s shares into one Citaglobal share on an entitlement date that will be determined at a later period.
The acquisition also comes with a net profit guarantee of RM60 million over three financial years, beginning from Citaglobal’s financial year ending Dec 31, 2022 (FY22) to FY24.
Subsequently, Citaglobal’s group executive chairman and president Tan Sri Mohamad Norza Zakaria, who is also the sole director and shareholder of TIZA Global, will see his stake in the company increase from 16.51% to 47.03% upon completion of the exercise.
The acquisition which is expected to be completed by the fourth of this year will also see a mandatory general offer (MGO) taking place during the same period following that. The mandatory take over price is at 19 sen per share.
Meanwhile, the consolidation of shares is expected to happen in the first quarter of 2023 once the MGO is completed.
“At the moment, that 47% gave me that ability to actually drive this company to where I want to bring it in the future. They are also investors that have been around in the bad days, during the time where the stock price is not good, the company making losses.
“It's time now if those investors are still around, to have that new trust and confidence in us, in my ability and my team of management to bring back to the glory days of the past of giving profit and dividend to the shareholders,” he said at a press conference following the group’s extraordinary general meeting (EGM).
In a statement following the group’s extraordinary general meeting on the same day, Citaglobal said its orderbook will effectively increase to RM984.7 million from RM754.5 million, following completion of the exercise.
The initial amount of RM754.5 million comprise Citaglobal’s order book as of June 30, 2022 of RM381 million, and the RM373.5 million engineering, procurement and construction (EPC) contract for the design, construction and equipping of Phase 1 of Perlis Inland Port secured on Aug 30 from Inland Port Perlis Sdn Bhd.
Meanwhile, CESSB is currently pursuing various projects with a target total project value of approximately RM1.66 billion.
Looking ahead, Norza sees ample opportunities within Malaysia’s 5G network rollout, with the group keen to participate in developing 5G telecommunication towers across the country.
“CESSB is a licensed network facilities provider with experience in installation and erection works.
“Citaglobal plans to participate in certain identified projects within the construction and telecommunications sector, which requires high value-added services,” he said.
Citaglobal, whose current businesses include civil engineering and construction, oil and gas, and manufacturing, intends to transform the group into a conglomerate that involves in renewable energy, facilities management, telecommunications, infrastructure and technology sectors.
Shares of Citaglobal settled up one sen or 3.77% at 27.5 sen, bringing it a market capitalisation of RM300.4 million.