Citaglobal acquires stakes in two PV firms for RM5 mil to boost RE footprint - MIDA | Malaysian Investment Development Authority
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Citaglobal acquires stakes in two PV firms for RM5 mil to boost RE footprint

Citaglobal acquires stakes in two PV firms for RM5 mil to boost RE footprint

04 Aug 2023

Diversified investment holdings group Citaglobal Bhd is buying stakes in two solar photovoltaic (PV) entities for RM5 million in total to strengthen its presence in the renewable energy (RE) sector.

In a press release on Friday (Aug 4), Citaglobal said that it acquired a 60% stake in Spectra Suria Sdn Bhd for RM2 million in cash, as well as a 40% stake in Nova Reeco Sdn Bhd for RM3 million in cash.

Citaglobal said that both companies are in the midst of securing projects from a range of government departments and quasi-government agencies, and carry a combined order book of RM268 million, thus boosting the group’s total order book to RM1.27 billion.

Along with the stake buy in Nova Reeco, Citaglobal also intends to purchase irredeemable convertible preference shares (ICPS) in the solar photovoltaic investor group, which are convertible into an additional 20% equity interest.

“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 RM7 million, in its Nova Reeco venture,” the group said, adding that this would bring its total investment in both acquisitions to a total of RM12 million.

The proposed acquisition of Spectra Suria is expected to be completed within 30 days, while the Nova Reeco acquisition is expected to be done within two months.

The acquisitions are conditional on a few terms, including Spectra Suria being issued a letter of award from Nova Spectra Energy for its appointment as the engineering, procurement, construction and commissioning contractor for the Lembaga Kamajuan Ikan Malaysia project.

“These proposed acquisitions are in line with the government’s recently launched National Energy Transition Roadmap and the strategic plan of Citaglobal in expanding its RE division,” Citaglobal commented.

Spectra Suria is principally involved in EPCC works of PV and energy storage systems, while Nova Reeco is involved in the business of organisation, promotions and management of events, specialised design activities and the wholesale of a variety of goods.+

Earlier this July, Citaglobal inked a memorandum of understanding (MOU) with UAE-based Abu Dhabi Future Energy Company PJSC (Masdar) to look into jointly developing RE projects in Malaysia, adding that the execution of the MOU will enable Citaglobal to strengthen the development of a 2GW solar farm (landed and floating) in Pahang that will cater to the local and export RE markets.

Both parties will also explore battery energy storage systems (BESS) as well as wind and other RE technologies, involving three units of Citaglobal and a 50:50 joint control company.

Meanwhile, in June, the group inked another MOU with Petronas Global Technical Solutions Sdn Bhd for a strategic collaboration including, but not limited to, RE technologies and applications, comprising BESS, biogas engine, biomass engineering, waste to energy, heat to energy and carbon capture and utilisation (CCU).

As at 4.30pm, shares of Citaglobal were trading one sen or 0.7% lower RM1.41, valuing the group at RM588.76 million.

Source: The Edge Malaysia