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Techfast wins RM2.2 bln contract to supply marine fuel oils

Techfast Holdings Bhd

KUALA LUMPUR, March 15 -- ACE Market-listed Techfast Holdings Bhd’s wholly-owned subsidiary, Fast Energy Sdn Bhd (FESB) has entered into a supply agreement with Singapore-based Wise Marine Pte Ltd to supply a range of marine fuel oils such as low sulphur fuel oil.

Techfast said based on monthly delivery of 30,000 tonnes and using the current average selling price of low sulphur fuel oil of approximately US$500 (US$1=RM4.1) per tonnes would translate to a total contract value of approximately RM2.2 billion over the three-year period. 

Under the agreement, FESB shall supply 10,000 to 30,000 tonnes of marine fuel oils per month, bringing the full year total supply to up to 360,000 tonnes for three years, and is expected to commence in the second quarter of 2021.

Techfast executive director Vincent Tan Wye Chuan said the group’s financial standing would also be enhanced with the completion of its recently announced proposed private placement exercise of 75.3 million new shares at an issue price of RM0.375, which will raise gross proceeds of RM28.2 million.

“Currently, we are seeing port congestion at Port Klang, as well as other major ports in Malaysia as a result of increased number of vessels arriving at the ports. With this new contract, we are well-positioned to ride the demand surge and post-pandemic recovery of the oil and gas(O&G) industry,” he said in a statement Monday.

Tan said the O&G activities were expected to ramp up this year with increased demand for oil, as more economies reopen following the implement mass COVID-19 vaccination programmes by governments.

“We anticipate marine fuel prices to rise following the return of Brent crude oil prices to the pre-pandemic levels, which are now trading at the US$60-US$70 per barrel range. This bodes well for the continued expansion of our new oil bunkering business,” he added. 

In addition, Techfast’s proposed acquisition of a 35 per cent-stake in CCK Petroleum Sdn Bhd, a Malaysian-based fuel supplier for RM26.25 million will also enable Techfast to expand its services scope and capture a bigger market share of the marine fuel industry.

The acquisition is expected to be completed by end-March 2021.

“Looking ahead, we will continue to build a strong foundation for long-term growth. We are bidding for more similar contracts to grow our order book, while undertaking strategic initiatives to further solidify our earnings base,” said Tan. 

-- BERNAMA

 

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