Thursday 28 Mar 2024
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KUALA LUMPUR (July 26): Toyo Ventures Holdings Bhd has submitted a letter justifying a force majeure event in an ongoing thermal power plant project in Vietnam to the Vietnamese authorities, after the authorities did not recognise the financial closing date of the project recently.

A force majeure event, if proven, removes liability for catastrophic or unforeseen events that prevent participants from fulfilling obligations.

In a Bursa Malaysia filing on Tuesday (July 26), Toyo Ventures said its project lawyer had on July 14, on behalf of its wholly-owned subsidiary Song Hau 2 Power Co Ltd (SH2PC), submitted a letter justifying the force majeure event to Vietnam's Ministry of Industry and Trade (MOIT) and the Electricity and Renewable Energy Authority (EREA).

"On July 22, EREA gave the opinion that MOIT does not recognise the financial closing date of the project on July 6. [Thus,] the company’s project lawyer is making arrangements to meet the relevant Vietnamese officials to determine the mitigating measures to recognise the financial closing date," Toyo Ventures added.

The group said it will make the necessary announcement on the progress of the power plant project to Bursa Securities in due course.

In November 2020, Toyo Ventures, via its wholly-owned subsidiary Toyo Ink Group Bhd and SH2PC, had executed a contract with MOIT, as well as a government guarantee with the Vietnamese government, to develop the power plant in Vietnam on a build, operate and transfer (BOT) basis.

The concession period will be for the period from Dec 29, 2020 until the date falling 25 years after the commercial operation date of the facility, which may be extended due to force majeure events and other circumstances as stipulated under the BOT contract.

Spanning 117.39ha with a capacity of 2 x 1,060MW, the project cost is estimated to be US$3.23 billion (about RM14.39 billion), which will be financed via a mix of debt and equity financing.

Toyo Ventures shares closed down four sen or 5.56% at 68 sen per share on Tuesday, giving the company a market capitalisation of RM79.53 million. A total of 2.53 million shares were traded.

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