KUALA LUMPUR: Genetec Technology Bhd is exiting its battery energy storage joint venture (JV) with Citaglobal Bhd, by disposing of its 50 per cent stake in Citaglobal Genetec BESS Sdn Bhd (CG BESS) to its former partner.
The stake, which comprises 250,000 ordinary shares, will be acquired by Citaglobal New Energy Sdn Bhd (Citaglobal NE), a subsidiary of Citaglobal.
The transaction also includes a proposed debt transfer, where Genetec will transfer to Citaglobal NE all rights and interests regarding an intercompany balance of RM2.24 million that is currently owed by CG BESS to Genetec.
The total purchase consideration for both the equity disposal and the debt transfer is a nominal sum of RM1.00.
Genetec’s board deemed this valuation fair and reasonable, noting that it was arrived at after considering the full impairment of Genetec’s investment in CG BESS, as well as the full impairment of the intercompany balance.
The JV, incorporated in January 2023 to manufacture electricity distribution apparatus and batteries, has incurred losses since the commencement of its operations. As of June 30, CG BESS recorded an unaudited loss after tax of RM51,911.63 and with net liabilities of RM4.35 million.
The rationale for the transaction centers on diverging corporate strategies. The Board stated that Genetec and Citaglobal possess distinct business objectives and strategic priorities, and terminating the collaboration enables each party to pursue its respective direction independently.
Upon the deal’s completion, the prior Collaboration Agreement established on Oct 6, 2022, will be terminated.
Genetec said the exit will not materially impact the group’s earnings, net assets, share capital, or gearing for the financial year ending June 30, 2027. Barring unforeseen circumstances, the transaction is expected to be finalized by the last quarter of 2026.