Citaglobal to undertake industrial park project in Pahang on its own as it exercises RM90m land buy option

• The land is the site of an industrial park project with an estimated gross development value of between RM321 million and RM397 million, according to Citaglobal's previous announcement.

KUALA LUMPUR (Sept 9): Citaglobal Bhd (KL:CITAGLB) will develop an industrial park project in Pahang on its own after exercising an option to acquire the land for RM90 million in cash and irredeemable convertible preference shares from its joint venture (JV) partner.

In a bourse filing, Citaglobal said its wholly owned Citaglobal Property Development Sdn Bhd (formerly Sinergi Dayang Sdn Bhd) had issued a notice on Sept 3 to exercise the call option to acquire the 247-acre land in Gebeng in Pahang from its JV partner, Tree Technologies Sdn Bhd. A conditional sale and purchase agreement was inked on Tuesday.

The land's purchase consideration comprises RM76.5 million in 95.63 million preference shares or ICPS-B in Citaglobal, issued at 80 sen apiece, and RM13.5 million in cash.

The land is the site of an industrial park project with an estimated gross development value of between RM321 million and RM397 million, according to Citaglobal's previous announcement.

The deal and the original JV are considered related-party transactions, as Citaglobal and Tree Technologies share major shareholders.

Citaglobal executive chairman, president and major shareholder Mohamad Norza Zakaria controls 65.5% of Tree Technologies via TIZA Global Sdn Bhd. Behind him is Gading Sari Holdings Sdn Bhd with a 30.98% stake, followed by Datuk Majid Manjit Abdullah with 3.52%. Mohamad Norza owns a 30.81% stake in Citaglobal, also via TIZA Global.

Upon the exercise of the call option, the original JV agreement, which stipulated a 65:35 equity split for the development between the partners, will cease.

The JV agreement, based on a bourse filing last year, noted that any funds already paid by Citaglobal or its unit to the JV and Tree Technologies would be accounted for to reduce the total purchase consideration.

The same filing also noted that the RM90 million consideration is a 1.1% discount to the land’s market value of RM91 million, as appraised by CBRE WTW Valuation & Advisory Sdn Bhd in November 2024.

Shares in Citaglobal ended half a sen or 0.6% lower at 83 sen, giving the company a market capitalisation of RM353.12 million.

As Penang girds itself towards the last lap of its Penang2030 vision, check out how the residential segment is keeping pace in EdgeProp’s special report: PENANG Investing Towards 2030.