Friday 21 Jun 2024
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KUALA LUMPUR (March 9): Toyo Ventures Holdings Bhd, which owns the 2.12-gigawatt (GW) coal-fired power plant project Song Hau 2 in Vietnam, has inked an agreement for the operations and maintenance (O&M) of the upcoming power plant.

Toyo Ventures’ wholly owned unit Song Hau 2 Power Co Ltd signed the O&M contract with Power Engineering Consulting Joint Stock Company 2 (PECC2) with an annual contract price of US$86 million (RM388.81 million) for the upcoming US$2.42 billion power plant.

The contract comprises site works, technical services and advisory services, it said.

“The entering into this agreement demonstrates the commitment of the owner (Song Hau 2 Power) to fulfil the requirements of the BOT (build-operate-transfer) contract,” Toyo Ventures said.

The O&M contract came just a week after Toyo Ventures’ unit signed a separate contract worth US$2.42 billion with a consortium of Sunway Construction Sdn Bhd and PECC2 to develop the power plant.

The project is scheduled for completion in four and a half years from the date Toyo Ventures issues a notice to proceed to the contractor.

Sunway Construction Sdn Bhd is a unit of Sunway Construction Bhd, while PECC2 is a subsidiary of Vietnam state-owned Vietnam Electricity.

“The contract price consists mainly of the estimation cost for preparatory works, civil part, boiler and auxiliaries, mechanical plant and electrical,” Toyo Ventures said when announcing the engineering, procurement and construction (EPC) contract on March 1.

Export-Import Bank of Malaysia Bhd had offered their services as mandated lead arranger, bookrunner and coordinating arranger for the syndicated financing facilities of up to US$2.42 billion for the project, it said.

Toyo Ventures announced back in December 2020 that it had executed the BOT contract with Vietnam’s Ministry of Industry and Trade (MOIT).

The BOT contract involves 25 years of concession before the facility is transferred to an entity nominated by MOIT.

A 20% equity portion of the US$2.42 billion project amounts to US$484 million or RM2.19 billion, rough calculations showed.

The ink and precision mould manufacturer, which has been largely loss-making since the pandemic, had RM88.07 million in cash and fixed deposits against RM7.93 million in borrowings.

It also has RM404.15 million in other payables, including RM355.15 million in payables to substantial shareholders Ng Lu Siong @ Ng Soon Huat, Eng Lian (L) Inc (ELLI) and Bukit Asa Sdn Bhd (BASB), which Toyo Ventures intends to settle via the issuance of 295 million five-year irredeemable convertible unsecured loan stocks at RM1.20 apiece for RM354 million.

Ng has a direct stake of 0.9% and an indirect stake of 14% in Toyo Ventures, while ELLI has 8.27% and BASB holds 5.73%, based on Toyo Ventures’ share base of 117.7 million shares. The exercise is yet to be completed.

Shares of Toyo Ventures closed at RM1.30, down one sen, on Thursday, giving it a market capitalisation of RM153.01 million. Year-to-date, the counter has risen nearly 33%.

Edited ByKathy Fong
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