KUALA LUMPUR (Nov 6): Techfast Holdings Bhd announced today it has signed a letter of intent (LOI) to supply up to 6.45 million barrels of diesel gas oil worth RM1.14 billion.

The company told the bourse that its subsidiary Fast Energy Sdn Bhd (FESB) has signed a LOI with Zillion Oil Timor LDA for which FESB will supply up to 6,436,800 barrels of diesel gas oil.

The LOI is for a period of three years commencing on Jan 1, 2021 until Dec 31, 2023.

The total contract value for the supply is estimated at RM1.14 billion at present oil price.

Techfast expects the LOI to contribute positively to the group's earnings.

The LOI is also in line with the group's objectives to diversify its business and expand its international presence, it said.

"The LOI will pave the way for further exclusive discussions between both parties prior to signing of a definitive supply agreement," it said.

Barring any unforeseen circumstances, both parties expect to finalise negotiations and execute the definitive agreement by first quarter of 2021.

Zillion Oil is a company incorporated in the Democratic Republic of East Timor and is principally engaged in the provision of oil trading business.

Up until its financial year 2019 ended Dec 31, 2019, Techfast was mainly involved in two business segments, namely manufacturing of self-clinching fasteners, electronic hardware and precision turned parts; as well as manufacturing of mould cleaning rubber sheets and LED epoxy encapsulant materials.

Just last month, Techfast saw the entry of Alvin Ang, founder of packaging firm Thong Guan Industries Bhd, into the former's board.

Techfast also saw Datuk Nur Jazlan — former chairman of the Public Accounts Committee of Malaysian Parliament — emerging at its board on Oct 19. The Johor Umno deputy chief is also Kanger International Bhd's chairman.

At closing, Techfast rose 0.82% to 61.5 sen, valuing the company at RM140.31 million.