The acquisition will cost Citaglobal RM2 million and RM3 million in cash for its respective stakes in Nova Reeco and Spectra Suria.
Documents sighted by The Edge confirmed Citaglobal entered into a binding term sheet with Nova Reeco executive chairman Nik Ahmad Huznee Nik Hussain, his sons Nik Umar and Nik Fadhlee, and Nova Spectra Energy Sdn Bhd (NSE) for the acquisition of the 60% stake on June 7.
Nova Reeco will be the asset owner for all future projects secured, while Spectra Suria shall be the engineering, procurement, construction and commissioning (EPCC) contractor.
Both firms reportedly have strong prospects to secure RM300 million worth of solar panel EPCC contracts, said Citaglobal executive chairman Norza Zakaria.
“(The acquisition) gives Citaglobal the registered solar photovoltaic investor status, which allows Citaglobal to act as an asset owner, provide power purchase agreements and solar leasing arrangements and services to government-linked companies and the government,” said Norza.
Agong increases stake
Over the last month, the Yang di-Pertuan Agong, Sultan Abdullah Sultan Ahmad Shah, has been upping his stake in Citaglobal.
On June 6, His Majesty acquired an additional 1.4 million shares, raising his stake to 7.97% or 33.3 million shares, increasing from 6.5% as at May 24.
This makes the Agong the group’s second largest shareholder after Norza, who holds a total stake of 39.25% directly and indirectly through TIZA Global Sdn Bhd.
Citaglobal is a diversified group involved in energy, telecommunication infrastructure, civil engineering and construction as well as manufacturing and property.
On June 1, the group’s wholly owned subsidiary Citaglobal Engineering Services Sdn Bhd (CESSB) accepted a RM13.3 million letter of award from Port Dickson Power Bhd for the decommissioning, dismantling, demolition and disposal of balance of a plant.
Just a month earlier on May 9, CESSB accepted a letter of award for works on the Klang Valley Electrified Double Track Phase 2 project amounting to RM 261 million.
For the first quarter ended May 30, 2023, Citaglobal posted a net profit of RM2.07 million, down 2% from the same period last year. Meanwhile, revenue shrank 16% to RM38.2 million from RM45.7 million.
At noon, Citaglobal’s share price was down 2.14% or 3 sen to RM1.37, giving it a market capitalisation of RM572.01 million.