Citaglobal Bhd which until recently was known as WZ Satu Berhad entered into a share purchase agreement with TIZA Global Sdn Bhd for the proposed acquisition of the entire equity interest in Citaglobal Engineering Services Sdn Bhd for indicative purchase consideration of RM140 million via the issuance of 736,842,105 new shares.
The Proposed Acquisition comes with an aggregate net profit guarantee of RM60mil 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 Shares held by the shareholders of Citaglobal, on an entitlement date to be determined and announced later into one Citaglobal Share after the completion of the Proposed Acquisition. This will lead to a corresponding upward adjustment in the trading price of Citaglobal Shares and may reduce the volatility of the trading price.
Tan Sri Dato’ Sri (Dr.) Mohamad Norza Zakaria, Executive Chairman & President of Citaglobal Bhd said: “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.
CESSB is principally involved in civil engineering and construction-related business and is registered with the Construction Industry Development Board of Malaysia as a qualified contractor with class Grade 7 accreditation. It has more than 10 years of experience in construction, mechanical and electrical services, project and facilities management, construction and engineering consulting, telecommunication, network developments, and maintenance.
Its confirmed order book of approximately RM193 million comprises construction, network construction and related projects, and sand mining operations. In addition, CESSB Group has various projects currently being pursued which are mostly under bilateral or direct negotiations with construction and network construction project owners amounting to approximately RM1.67 billion.
Meanwhile, Citaglobal has an existing orderbook of RM539 million upon taking over CESSB total orderbook will be RM732 million.
KAF Investment Bank has been appointed by Citaglobal as the Principal Adviser for the Proposals.
