Citaglobal: No immediate plan to develop RM73 mil land on Jalan Tun Razak

• The company previously said the land “presents a strategic opportunity” for long-term value growth. The land will be acquired by Citaglobal’s indirect wholly-owned unit Sinergi Dayang Sdn Bhd (SDSB).

KUALA LUMPUR (Feb 5): Citaglobal Bhd (KL:CITAGLB) said that the company has no immediate plan to develop the 1.58-acre land at Jalan Tun Razak, Kuala Lumpur that it intends to acquire from Bank Islam Malaysia Bhd (KL:BIMB) for RM73 million.

“This strategic approach is to maximise long-term value creation (of the land),” Citaglobal said in an exchange filing on Wednesday. The energy and construction outfit was providing additional information following the acquisition announcement last Friday.

The company previously said the land “presents a strategic opportunity” for long-term value growth. The land will be acquired by Citaglobal’s indirect wholly-owned unit Sinergi Dayang Sdn Bhd (SDSB). The subsidiary is mainly involved in turnkey contractor, property developer and mining activities.

On the net book value of the land, Citaglobal said that it cannot disclose the value as it is not privy to this information from Bank Islam.

The group, however, clarified that it had conducted an independent valuation for the land by Infra Harta Consultants Sdn Bhd on Oct 21 last year.

“The valuation, based on a market/comparison approach, assessed the indicative market value of the land at RM70 million on an ‘as-is’ basis,” it explained.

Meanwhile, the land would be valued at RM138 million on an assumption basis — assuming it is approved for mixed commercial development, the current express condition is revoked, and the lease period is extended to 99-year leasehold tenure.

The group said that it planned to fund the acquisition through internally-generated funds and bank borrowings. As at end-September 2024, Citaglobal’s cash stood at RM30.65 million, while its borrowings amounted to RM93.28 million, according to its latest financial statements.

It also reiterated that the proposed acquisition will be going through several approvals from authorities that are expected to be completed in at least nine months.

“BIMB is responsible for securing approval from the Pejabat Tanah & Galian (PTG KL) to revoke the current express condition, a process expected to be completed within six months from the submission date,” it said.

“Meanwhile, SDSB must obtain approval from the Economic Planning Unit (EPU) for the transaction, which is anticipated to take approximately two to three months to finalise,” it added.

Shares of Citaglobal closed down 1.5 sen or 1.74% at 84.5 sen on Wednesday, giving the group a market capitalisation of RM359.53 million.

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