Toyo Ink enters into US$35m consultancy service agreement

Toyo Ink enters into US$35m consultancy service agreement
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GEORGE TOWN (Sept 23): Toyo Ink Group Bhd has entered into a US$35 million consultancy service agreement with Phu My Vinh Consulting Investment and Trading Service Company Ltd (PMV) for the former’s venture to secure a power generation project in Vietnam.

The agreement facilitated PMV’s advice on research while supporting the negotiation on the build-operate-transfer (BOT), power purchase agreement (PPA) and land lease agreement (LLA) pertaining to the two 1,000-MW coal-fired thermal power plants construction in the Song Hau Power Complex with the relevant authorities in Vietnam, according to the filing to Bursa Malaysia today.

“[Apart from advice and negotiation] PMV [is required to] prepare all requisite documentations for the purpose of negotiation and eventual procurement of the requisite approvals for the execution of the BOT contract, PPA and LLA between TIGB (Toyo Ink) and the relevant authorities in Vietnam,” it said.

Yesterday, Toyo Ink’s shareholders granted the approval for the execution of the US$35 million consultancy service agreement.

The total fee payable for the consultancy service of US$35 million, excluding any associated taxes such as value-added tax, was equivalent to 1% of the total development cost of the power plant project at US$3.5 billion (RM13.9 billion), according to the filing.

As of now, the ink manufacturer has already made a payment of RM160.2 million toward the power plant project in Vietnam. The consultancy fees would raise the amount invested to RM310 million before Toyo Ink has even secured the project.

Toyo Ink’s share price is unchanged at 63 sen for a market capitalisation of RM67.4 million.

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