Citaglobal firms up collaboration to develop eco-friendly industrial park, proposes one-for-five bonus warrants

• The industrial park is estimated to have a gross development value (GDV) of between RM321 million and RM397 million, according to Citaglobal.

KUALA LUMPUR (Nov 28): Citaglobal Bhd (KL:CITAGLB) has firmed up its collaboration with electric vehicle maker Tree Technologies Sdn Bhd to develop an industrial park with green elements in Pahang. It also proposed a bonus issue of up to 88.07 million free warrants.

Following a binding term sheet inked in late August, Citaglobal and wholly-owned unit Sinergi Dayang Sdn Bhd have now inked a joint venture (JV) agreement with Tree Technologies to develop the industrial park on a 247-acre land in Gebeng, based on the previously agreed 65:35 equity basis, according to the company’s bourse filing on Wednesday.

The industrial park is estimated to have a gross development value (GDV) of between RM321 million and RM397 million, according to Citaglobal.

Terms of the JV agreement remain unchanged compared to the term sheet, under which Citaglobal was granted a call option to acquire the land for RM90 million, to be satisfied via a cash and the issuance of irredeemable convertible preference shares in Citaglobal (ICPS-B) to Tree Technologies at an issue price of 80 sen per ICPS-B.

Citaglobal plans to amend its constitution to facilitate the issuance of the ICPS-B under the proposed option.

Tree Technologies is 65.5% controlled by Tan Sri Dr Mohamad Norza Zakaria via TIZA Global Sdn Bhd, Gading Sari Holdings Sdn Bhd (30.98%) and Datuk Majid Manjit Abdullah (3.52%).

The joint development with Tree Technologies is deemed a related-party deal as Citaglobal executive chairman, president and major shareholder Tan Sri Mohamad Norza Zakaria is also the sole director and sole shareholder of TIZA Global, which is a major shareholder of Citaglobal with a 30.81% stake, as well as the largest shareholder of Tree Technologies, with a 65.5% stake.

Meanwhile, Citaglobal announced a proposal to undertake a bonus issue of up to 88.07 million warrants on a one-for-five basis.

The exercise price of the warrants will be fixed later. Based on an illustrative price of RM1, assuming all the warrants are exercised, the batch could raise RM88.07 million for the group for future business investment, expansion and/or working capital.

The bonus issue is expected to be completed by the second quarter of 2025, which is also when the joint venture is expected to commence.

Asia Equity Research Sdn Bhd has been appointed as independent adviser to advise non-interested shareholders on the related-party proposal.

Shares in Citaglobal ended half a sen or 0.57% higher at 88 sen on Wednesday, valuing the company at RM377.23 million.

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