Fast Energy Holdings Bhd (FEHB) is planning to diversify its business activities and strengthen its financial position.
It plans to expand into the consumer electronics business and reduce its dependence on petroleum trading where the majority of its revenue is currently generated.
To facilitate this diversification, FEHB has established a subsidiary named Fast Technology Sdn Bhd (FTSB) that will be engaged in the wholesale, distribution, and retail sale of mobile devices and electronic products.
FTSB said it has already secured a distributor agreement with Great Work Corporation Limited, enabling it to distribute and sell FreeYond’s mobile devices in East and West Malaysia for the next five years.
By venturing into the consumer electronics sector, FEHB expects to generate an additional source of income and revenue, with a target of contributing at least 25% of the group’s net profits or diverting more than 25% of its net assets.
Shareholder approval is required for this diversification, indicating the importance of transparency and collective decision-making.
To strengthen its financial position further, FEHB plans to undertake a rights issue with warrants.
This initiative involves issuing new ordinary shares and detachable warrants to existing shareholders.
The rights shares will be offered on a 1-for-1 basis, with shareholders receiving 1 warrant for every 2 rights shares subscribed.
The primary objectives of the rights issue are to fortify FEHB’s capital base, improve its net assets, reduce gearing, and provide financial flexibility for future business expansion.
Additionally, it presents an opportunity for shareholders to participate in the company’s growth and potentially benefit from capital appreciation through the warrants.
The proposed rights issue with warrants is undertaken to raise maximum proceeds of RM19.38 million.
FEHB have earmarked 35% of the funds to support the working capital of their petroleum trading business, enabling them to purchase essential petroleum products like marine fuel oil and marine gas oil.
Recognizing the potential of the consumer electronics segment, FEHB has set aside 15% of the proceeds to provide adequate working capital for their consumer electronics business.
This allocation will cover administrative and selling expenses, fostering the development and expansion of this new sector within the group.
Furthermore, the group has dedicated 50% of the proceeds to support other operational expenditures, such as office overhead costs, salaries, new staff hiring expenses, administrative and selling expenses, and utilities. –TMR