KUALA LUMPUR: Citaglobal Bhd is acquiring a 60% stake in registered solar photovoltaic provider Spectra Suria Sdn Bhd for RM2mil cash and a 40% stake in registered solar photovoltaic investor company Nova Reeco Sdn Bhd for RM3mil cash.
Spectra Suria and Nova Reeco are securing projects from a variety of government departments and quasi-government agencies. Both acquisitions come with an orderbook of RM268mil, boosting Citaglobal’s total orderbook will be boosted to RM1.27bil and above.
In a statement, Citaglobal said it also intends to purchase irredeemable convertible preference shares (ICPS) in Nova Reeco. These shares are convertible into an additional 20% equity interest in Nova Reeco.
In addition, Citaglobal has committed to making further investments, either in the form of a shareholder's advance or redeemable preference shares with a value of at least RM7mil, in its Nova Reeco venture. This would bring its total investment in both acquisitions to a total of RM12mil.
Citaglobal said these acquisitions are conditional on a few terms. Key among them, Spectra Suria is to be issued a letter of award from Nova Spectra Energy for its appointment as the engineering, procurement, construction and commissioning (EPCC) contractor for the Lembaga Kemajuan Ikan Malaysia (LKIM) project.
Citaglobal executive chairman and president Tan Sri Mohamad Norza Zakaria said: “We are very pleased with these earnings-accretive acquisitions. Besides providing us with a solid orderbook to boost our earnings, these deals are further evidence of Citaglobal’s commitment to making its mark in the renewable energy industry.”
The proposed acquisition of Spectra Suria is expected to be completed within 30 days, while the proposed acquisition of Nova Reeco is expected to be completed within two months.
Upon completion, both acquisitions are expected to contribute positively to the future earnings of the group, as and when Spectra Suria and Nova Reeco begin recognising profits from their projects.