KUALA LUMPUR (Nov 18): WZ Satu Bhd rose amid active trade on Thursday (Nov 18) morning after the group proposed to acquire the entire equity interest in Citaglobal Engineering Services Sdn Bhd (CESSB) from its chairman and largest shareholder Tan Sri Mohamad Norza Zakaria’s private vehicle Citaglobal Sdn Bhd for an indicative price tag of RM140 million.

The construction firm, which suspended its share trading on Wednesday, gained as much as seven sen or 31.11% to 29.5 sen after it resumed trading on Thursday morning.

At 9.57am, the counter had pared some gains at 25.5 sen, still up three sen or 13.33%. At 25.5 sen, the counter was valued at RM169.13 million.

The counter, which emerged as the most actively traded stock on Thursday morning, had seen 91.67 million shares traded so far in the day.

Year to date, the counter had surged 59.38%.

In a bourse filing on Wednesday, WZ Satu said the company had entered into a binding agreement with Citaglobal to exclusively explore and negotiate further on the proposed acquisition.

The transaction is proposed to be satisfied by WZ Satu via RM80 million (19 sen per share) in shares and RM60 million (19 sen per share) via redeemable convertible preference shares (RCPS).

Norza's stake in WZ Satu will therefore increase from 23% to roughly 60% once this deal is completed.

The proposed acquisition also comes with an aggregrate net profit guarantee of RM60 million for the financial year ending Dec 31, 2022 (FY22), FY23 and FY24.

WZ Satu has been loss-making since 2018. However, for the nine months up to Sept 30, 2021, the company recorded a net profit attributable to owners of the company of RM127,000 on the back of a revenue of RM190.4 million.

“With this exercise, WZ Satu will be my flagship company, and I intend to bring the company to greater heights. I look forward to growing WZ Satu to becoming a serious player in the facilities management, telecommunications, energy, infrastructure and technology sectors,” said Norza.

“For a start, we are looking to transform WZ Satu. This will be possible with the profit guarantee Citaglobal is providing. We are already identifying and looking to bid for more projects as we are ready,” he added.