This article first appeared in The Edge Malaysia Weekly on November 7, 2022 - November 13, 2022
Toyo Ventures Bhd has taken another step towards building a power plant in Vietnam. But despite having put in millions and after some 15 years, the project has yet to get off the ground.
The company, which has Eng Lian Enterprise as a major shareholder, started its Vietnam project in 2007. It managed to secure a 25-year concession to build, operate and transfer the power plant only in December 2020.
Despite having secured a concession agreement and having done a financial close, the project is still not up and running.
After having invested some RM417 million in the venture, the bulk of which came from shareholders’ advances, Toyo Ventures completed a financial close on July 6, 2022.
However, its financial close is still a niggling issue with the Vietnam Ministry of Industry and Trade (MOIT). According to the company’s announcements, the MOIT does not recognise the financial close that was completed on July 6 as it was delayed by two weeks.
Toyo Ventures is making representations to MOIT to mitigate the reasons for the delay.
Last week, the company inked a term sheet with a contractor from Vietnam to undertake the engineering, procurement, construction and commissioning of the power plant. Power Engineering Consulting JS Company 2, which is the Vietnamese contractor, is to secure all the local approvals required to undertake the works.
As for Toyo Ventures, it has to ensure that the financial close is in order.
The power plant in Vietnam, estimated to cost US$3.2 billion (RM15.2 billion), is an important business for Toyo Ventures, which has a market capitalisation of RM121 million. In its last annual report for the financial year ended September 2021, the external auditors had expressed concerns over investments in the power plant.
After securing the 25-year concession in December 2020, the group entered into an agreement to divest part of its interest in the power plant to China Energy Engineering Investment Corp (CEEIC).
The deal would have eased its balance sheet. But it is not known if the deal with CEEIC has been completed yet.
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