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Malaysia: Fast Energy proposes acquisition of CCK Petroleum Sdn Bhd shares

24 May 2022

Malaysia-listed oil bunkering and renewable energy provider Fast Energy Holdings Berhad on Wednesday (18 May) made three proposals to shareholders including a proposed acquisition of CCK Petroleum Sdn Bhd’s (CCKSB) ordinary shares.

CCKSB, principally involved in the trading of bunker oil and provision of oil bunkering services which involves the trading of marine fuels, is currently a 35%-owned associate company of Fast Energy.

In the proposed acquisition, Fast Energy will acquire 175,000 ordinary shares, representing 35.0% equity interest in CCKSB, from CCKSB shareholder Mohd Faizul bin Nasir for a purchase consideration of MYR 28,000,000.

This amount is to be satisfied via a combination of MYR 23,972,660 in cash and MYR 4,027,340 via the issuance of 11,800,000 new ordinary shares in Fast Energy after the completion of the Proposed Share Consolidation at an issue price of MYR 0.3413 per Fast Energy Share. 

Upon completion of the proposed acquisition, Fast Energy will hold 70% equity interest in CCKSB and accordingly, CCKSB will become a subsidiary company of Fast Energy.

The proposed acquisition is to consolidate profits generated by CCKSB into Fast Energy, and the acquisition of additional equity interest in CCKSB is expected to allow the Group to recognise a higher percentage of PAT (profits after taxation) from CCKSB, explains Fast Energy.

The Proposed Acquisition would also increase the earnings of Fast Energy Group moving forward, premised on the Profit Guarantee provided by the vendor, Mohd Faizul bin Nasir, to Fast Energy for a period of one financial year up to the FYE 31 December 2023, of which the total profit attributable to Fast Energy is MYR 1,750,000 pursuant to the Proposed Acquisition as well as the future prospects of CCKSB. 

CCKSB’s revenue is primarily contributed from the trading of marine fuel and adopts an asset-light business model whereby CCKSB does not own any vessels and instead relies on its suppliers’ vessels to deliver petroleum products directly to its customers.

Its business network enables the company to supply marine fuels to customers with marine operations in or that are transiting major ports in Malaysia in particular the Johor Port, Penang Port and Port Klang areas.

Manifold Times on 13 May reported Fast Energy proposing the disposal of subsidiary Cape Technology Sdn Bhd to finance the operational expenses of its oil bunkering, marine oil trading and renewable energy business.

Related: Malaysia: Fast Energy proposes disposal of Cape Technology over bunkering ambition
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Related: Malaysia: Fast Energy bunkering operations record RM 213,000 net profit in Q2 2021
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Related: Malaysia: Techfast Holdings & Wise Marine ink USD 540 million bunker supply contract
Related: Malaysia: Techfast starts oil trading unit, unveils bunker supplier ambition with proposed CCK Petroleum acquisition
Related: Malaysia: Techfast Holdings acquires 35% stake in bunker trading firm CCK Petroleum


Photo credit: Esmonde Yong on Unsplash
Published: 24 May, 2022

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