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Citaglobal Signs SPA To Acquire Citaglobal Engineering For RM140M

Citaglobal Bhd has inked a share purchase agreement (SPA) with TIZA Global Sdn Bhd (TGSB) in proposition to acquire the entire equity stake in Citaglobal Engineering Services Sdn Bhd (CESSB) for RM140 million.

This will take place via the issuance of 736.84 million new shares in Citaglobal at RM0.19 per share. The acquisition comes with an aggregate net profit guarantee of RM60 million for three full financial years ending 2022, 2023 and 2024.

In conjunction with the proposed acquisition, the company is proposing to undertake the proposed share consolidation to consolidate every five Citaglobal held by the shareholders of Citaglobal into one Citaglobal share after the completion of the proposed acquisition.

Executive chairman & president Tan Sri Mohamad Norza Zakaria said that in line with the objectives and strategy of Citaglobal to deliver sustainable growth and value creation to the shareholders, the proposed acquisition will enable the group to capitalise on the resources, expertise and strength of the enlarged CESSB group in securing projects and contracts, thereby enhancing and strengthening the order book, financial position and prospects of the enlarged Citaglobal group.

“Furthermore, the settlement of the purchase consideration via issuance of consideration shares will allow Citaglobal to enhance its engineering and construction segment without any immediate impact on the cash flow and gearing levels of the group.

“In addition to providing an opportunity for Citaglobal group to bolster its earnings stream, the profit guarantee will also contribute positively to the earnings of the enlarged group which in turn creates value for the shareholders of Citaglobal,” he added.

CESSB also has a confirmed order book of RM 193 million comprising construction, network construction and related projects, and sand mining operations and has various projects currently being pursued, mostly under bilateral or direct negotiations with construction and network construction project owners, amounting to approximately RM1.67 billion.


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