Raya International diversifies into oil bunkering services

PETALING JAYA: Raya International Bhd is diversifying into the oil bunkering services business and planning a special bumiputra issue of 20.5 million shares, representing 12.5% of its stake, to fund its expansion in the new business.
In a stock exchange filing yesterday, the company expects to raise RM4.51 million from the special issue based at an illustrative indicative issue price of RM0.22 per bumiputra share.
“Part of the proposed special bumiputra issue proceeds is intended to cater for the expansion of the group’s activity in providing bunkering services for marine fuel, petroleum and petroleum-based products.
“Approximately RM4.15 million will be allocated mainly for the purchases of marine gas oil from Singapore and local suppliers, which will be supplied to ships off the ports for their own use (i.e. oil bunkering activity),” it said.
Bunkering services refers to the provision of marine fuels to ships, as well as other ocean faring vessels.
Raya said the proposed diversification is part of the group’s long-term strategy of diversifying into other businesses or industries with growth prospects instead of depending solely on its existing business in trading of air filtration system and fast moving consumer products, ancillary support services and general trading.
Raya said the proposed diversification is expected to contribute 25% or more net profit of the group and may result in a diversion of more than 25% of the net asset to an operation, which differs widely from its current operations.
Raya will hold an EGM to seek approval for the proposed diversification.
On Dec 29, 2015, Raya’s subsidiary Selatan Bunker (M) Sdn Bhd signed a partnership agreement with Tumpuan Megah Development Sdn Bhd to work toward the development of bunkering services for marine fuel in Pasir Gudang, Johor. Selatan Bunker will provide technical and marketing expertise, as well as funding for all business matters related to oil bunkering activities.