WZ Satu gets business injection, new shareholders

WZ Satu chairman Tan Sri Mohamad Norza Zakaria

PETALING JAYA: Interesting developments are taking place in civil engineering group WZ Satu Bhd.

Chairman Tan Sri Mohamad Norza Zakaria (pic) will be injecting his private vehicle into the construction player for RM140mil, which will be settled via the issuance of new shares and raise his stake to 60%.

This injection, which comes with a profit guarantee, will help WZ Satu return to profitability in the financial year ending Dec 31, 2022, according to the group.

The company will also see the emergence of a number of new shareholders, including the major shareholder of Genetec Technology Bhd Aaron Chen Kai Voon.

This will be done via a private placement exercise at 17 sen per share.

Chen will be subscribing 75.2 million shares worth RM12.79mil.

Under the minimum scenario, Chen will own a 8.33% stake, while under the maximum scenario, he will own 5.29% of WZ Satu.

The other subscribers namely Datuk Jeeventhiran Ramanaidu, Francis Sa Chee Peng and Raja Datuk Mufik Affandi Raja Khalid will subscribe about 75.2 million shares collectively, similar to the value injected by Chen.

The cumulative RM25.57mil proceeds to be raised from the private placement will be used for additional investment in existing business and working capital.

The trading of the WZ stock was suspended yesterday, pending the release of a material announcement.

Prior to the suspension, the counter closed at 22 sen per share.

A source close to WZ Satu told StarBiz that Chen would play an active role in the company.

“The two developments will help improve the company’s order book and strengthen its business operations,” the source said.

In a statement yesterday, WZ Satu proposed to buy 100% equity interest in Citaglobal Engineering Services Sdn Bhd (CESSB) from Norza’s Citaglobal Sdn Bhd.

WZ Satu entered into a binding agreement with Citaglobal to “exclusively explore and negotiate further” the proposed acquisition.

CESSB has an order book of about RM500mil and is involved in the business of construction, mechanical services and telecommunication tower developments, among others.

“The proposed acquisition comes with an aggregate net profit guarantee of RM60mil for three full financial years ending 2022, 2023 and 2024,” WZ Satu said.

According to Norza, who is the president of Olympic Council of Malaysia, WZ Satu will be his flagship company post-injection of CESSB.

“For a start, we are looking to transform WZ Satu. This will be possible with the profit guarantee that CESSB is providing.

“We are already identifying and looking to bid for more projects as we are ready,” added Norza.

Norza’s Citaglobal will be paid RM140mil via the issuance of 421,052,632 new ordinary shares in WZ Satu at an issue price of 19 sen per share, in addition to the issuance of 315,789,474 new redeemable convertible preference shares at 19 sen per share.

Norza has a 23% stake in WZ Satu. This proposed acquisition is subject to certain conditions precedent being obtained, namely the approval of shareholders at an EGM, and the approval of Bursa Malaysia for the issuance and quotation of the new WZ Satu shares.

In an announcement on Nov 16, WZ Satu told the stock exchange that it had fixed the issue price for its proposed placement at 17 sen.

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