KUALA LUMPUR (Dec 6): Toyo Ventures Holdings Bhd (KL:TOYOVEN) has issued a notice of dispute to Vietnam's Ministry of Industry and Trade (MOIT) over the termination of the Song Hau 2 thermal power plant project by the Vietnamese government.
The notice was issued via its indirect wholly owned subsidiary, Song Hau 2 Power Company Ltd (SH2P), according to the group's bourse filing on Monday.
Following this, Toyo Ventures said the parties are required to engage in good faith discussions for at least 45 days to resolve their dispute, based on the build-operate-transfer (BOT) contract that they entered into for SH2P to develop and operate the project.
"We have nominated our representative to facilitate and follow up to schedule the discussions. If we fail to gain satisfactory outcome pursuant to the said notice, we will then exercise all legal remedies available to us under the law," the group said in a filing with Bursa Malaysia on Monday.
In July 2024, Toyo Ventures confirmed that the Vietnamese government had terminated the Song Hau 2 thermal power plant BOT contract. MOIT alleged that the termination was a result of Toyo Ventures’ failure to resolve the necessary financial arrangements for the project despite the threat of contract termination based on a 90-day notice.
However, Toyo Ventures had announced just a month before that that SH2P had secured a US$980 million (RM4.41 billion) equipment financing facility from i-Power Solutions Pte Ltd to finance up to 70% of the invoice amount for the procurement of equipment required for the project's engineering, procurement, commissioning and construction (EPCC) works.
Following the termination, the financing facility was said to be no longer applicable.
Two months before Toyo Ventures confirmed the termination, The Edge Malaysia had reported, in its May 13-19, 2024 edition, that Toyo Ventures was facing challenges in securing sufficient financing for the project before the deadline.
The project’s initial exclusive mandated lead arranger, Export-Import Bank of Malaysia Bhd, was appointed in November 2023 to arrange the proposed syndicated financing facilities of up to US$2.42 billion for the project.
Shares of Toyo Ventures closed unchanged at 51.5 sen with a market capitalisation of RM67.79 million.
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