The share price of Tipco Asphalt Public Company Limited (TASCO) hit the floor at the opening bell, dropping ฿3.50/share or 14.64% to ฿20.40/share. after the U.S ordered the company to wind down its crude oil procurement from Venezuela by the end of November 2020.
Tipco Foods Public Company Limited (TIPCO), TASCO’s major shareholders, also hit the floor in the morning session, dropping by ฿1.05/share or 14.48% to ฿6.20/share.
TASCO stated that the U.S. warned that the company could face a sanction if not compromised. The analyst expected an impact to TASCO’s share price as TASCO would lose around 50% of its revenue.
The company’s asphalt refinery in Kemaman, Malaysia is specifically designed to refine heavy crude oil from Venezuela. Since its commissioning in 2007, 90% of the refinery’s feedstock was sourced from Venezuela.
Since the Kemaman refinery produces half of TASCO’s asphalt supply, the shutdown will mostly impact directly our wholesale trading business.