Citaglobal Tower JV turns unconditional; shareholders back RM42.1 mil placement

PETALING JAYA (June 5): Citaglobal Bhd's proposed joint venture with Varia Bhd for the RM657 million Citaglobal Tower development along Jalan Tun Razak has become unconditional after all conditions precedent under the joint venture agreement (JVA) were fulfilled yesterday.

The development will be undertaken on a 1.58-acre leasehold parcel held under Master Title PN 27027, Lot 147, Seksyen 87, Mukim Bandar Kuala Lumpur. Both Citaglobal and Varia filed separate announcements with Bursa Malaysia yesterday confirming the JVA had become unconditional on the same date.

Development components

The Citaglobal Tower Development comprises a Grade A office tower, serviced apartments, commercial shop lots, and a multi-level podium parking facility. Under the joint venture structure, Varia Crest Sdn Bhd — an indirect wholly-owned subsidiary of Varia Bhd — will be responsible for the planning, development, construction, marketing, and funding of the development.

In consideration of the land contribution, Citaglobal Property Development Sdn Bhd is entitled to a package estimated at approximately RM118 million, comprising cash, repayment by Varia Crest to BIMB in accordance with the land acquisition loan repayment schedule, office space entitlement and consideration in-kind, together with a potential profit uplift. Based on Citaglobal's earlier disclosures, the joint venture is expected to generate an estimated gain of approximately RM26.7 million for the group.

Shareholders' approvals

Shareholders approved the proposals at an EGM held on June 3, including a private placement of 46,768,000 new ordinary shares to Berjaya Securities Sdn Bhd at a subscription price of RM0.90 per share, expected to raise gross proceeds of approximately RM42.1 million.

The placement proceeds will be used to support the group's funding requirements, including the cash consideration relating to its completed Gebeng Land Acquisition, expansion and investment in existing businesses — including renewable energy and bioenergy initiatives — as well as working capital and placement-related expenses.

In a press release issued yesterday, Citaglobal executive chairman and president Tan Sri Dr Mohamad Norza Zakaria said the joint venture allows the group to "unlock value from a prime Kuala Lumpur landholding in a disciplined manner" while retaining a long-term commercial presence in the completed development through its office entitlement.

The development remains subject to relevant regulatory and development approvals, and the group said it will provide further updates as key milestones are achieved.

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