According to its filing with Bursa Malaysia today, Citaglobal has acquired a 60% stake in Spectra Suria Sdn Bhd for RM2 million in cash, and a 40% stake in Nova Reeco Sdn Bhd for RM3 million in cash.
Through the two acquisitions, Citaglobal’s total order book will increase by RM268 million to more than RM1.27 billion, the filing said.
Besides acquiring a 40% stake in Nova Reeco, Citaglobal has also expressed its intention to buy irredeemable convertible preference shares (ICPS) in the company.
“These shares are convertible into an additional 20% equity interest in Nova Reeco,” Citaglobal said.
The group has also pledged to undertake additional investments, which could take the shape of a shareholder’s advance or redeemable preference shares, amounting to a minimum of RM7 million, in its Nova Reeco venture.
This would bring its total investment in both acquisitions to RM12 million, Citaglobal said.
The finalisation of the planned purchase of Spectra Suria is expected to occur within a span of 30 days, whereas the Nova Reeco acquisition is expected to conclude within two months.
Citaglobal stated that these acquisitions are subject to specific conditions.
One of them is that Spectra Suria will be appointed by Nova Spectra Energy as the engineering, procurement, construction and commissioning (EPCC) contractor for a project commissioned by the Fisheries Development Authority of Malaysia (LKIM).
Citaglobal executive chairman Norza Zakaria said the company is pleased with the earnings-accretive acquisitions.
“Besides providing us with a solid order book to boost our earnings, these deals are further evidence of Citaglobal’s commitment to making its mark in the renewable energy industry,” said Norza.
Spectra Suria is principally involved in EPCC works related to solar PV and energy storage systems.
Nova Reeco primarily engages in event organisation, promotion, and management, as well as specialised design activities. Additionally, they are involved in the wholesale distribution of various goods.
At market close today, Citaglobal’s share price was down 1 sen or 0.7% at RM1.41, giving it a market capitalisation of RM588.76 million.