Citaglobal Bhd is disposing of its 49% stake in bauxite mining company SE Satu Sdn Bhd for RM4.8mil back to its original founders and exits the mining business.
As part of the settlement, the company will acquire a piece of freehold land measuring 31.313 ha in Sungai Karang, Pahang for RM10.08mil. This piece of land has an audited book value of RM13.44mil.
Significantly, this land is in the vicinity of the East Coast Rail Link (ECRL) project, which the company intends to utilise for the execution of its ECRL independent power producer (IPP) project.
Citaglobal and its consortium partner Reneuco Bhd were recently awarded a Letter of Intent to become the independent power producer for the ECRL project from Malaysia Rail Link Sdn Bhd.
The consortium will be responsible for the planning, design, financing, development, construction, installation, completion, commissioning and operation of the ECRL IPP project.
“Malaysia’s carbon neutral goal by 2050 will require significant increases in the amount of electricity from renewable sources. Identifying suitable and economically desirable land is getting harder. We are extremely pleased to be acquiring this piece of land in Sungai Karang. Not only is its location close to the ECRL project, but it also has the suitable composition and requirements to house renewable energy,” said Citaglobal Executive Chairman & President and major shareholder Tan Sri Dato’ Sri (Dr.) Mohamad Norza Zakaria.
“Furthermore, disposing the bauxite mining business is in line with Citaglobal’s vision of exiting our legacy business as we look forward to participating in technology-driven sectors he added.
Meanwhile, this deal, which involves the disposal of the 49% stake in SE Satu and the acquisition of the Sungai Karang land for RM10.08mil will see Citaglobal effectively paying out RM5.28mil to Spring Energy Sdn Bhd.
Based on the latest audited consolidated financial statements of Citaglobal for its financial year ended Dec 31, 2021, and assuming that the proposed disposal had been effected on Dec 31, 2021, the group is expected to realise a net gain on disposal of approximately RM2.01mil, which represents earnings per share of approximately 0.3 sen, based on the weighted average number of 663.95 million shares.
