KUALA LUMPUR (Dec 27): Toyo Ventures Holdings Bhd, whose share price has gained 65% in the last week, is going to issue irredeemable convertible unsecured loan stocks (ICULS) to settle RM354 million worth of debts related to its Vietnam power plant project.
The manufacturer plans to issue 295 million ICULS at RM1.20 apiece to settle the bulk of the RM355.15 million in debt owed to three creditors: Ng Lu Siong @ Ng Soon Huat, Eng Lian (L) Inc (ELLI), and Bukit Asa Sdn Bhd (BASB).
The three creditors are substantial shareholders of Toyo Ventures. ELLI holds 8.27% in the company while Ng, who is also a director in ELLI, has a direct stake of 0.9% and an indirect stake of 14% in the listed entity. BASB owns 5.73% in the company.
The issuance was proposed following the termination of a settlement agreement in February this year to resolve its debts. With a five-year tenure, the ICULS can be converted into new Toyo Ventures shares on a one-for-one basis.
Should the ICULS be converted, Ng will hold as much as 74.67% indirect stake in the company. However, it is not the intention of the creditors and parties acting in concert with them to undertake a mandatory takeover offer for Toyo Ventures, the company said.
It will hold an extraordinary general meeting to seek shareholders’ approval for the proposal.
Toyo Ventures holds a 25-year concession to build, operate and transfer the power plant in Hau Giang, Vietnam which is expected to cost some US$3.25 billion (RM14.96 billion).
In 2021, Toyo Ventures entered into an agreement to divest its stake in the project to China Energy Engineering Investment Corp Ltd. On Oct 25 this year, Toyo Ventures' unit Toyo Ink Group Bhd entered into a term sheet for key commercial terms with Power Engineering Consulting JS Company 2 in relation to the engineering, procurement and construction, commissioning and start-up of the project.
Prior to the latest announcement, Toyo Ventures received an unusual market activity (UMA) query from Bursa Securities over the sudden spike in its share price.
Other than the proposed ICULS issuance and the finalisation of the power plant contract, Toyo Ventures said in its reply to Bursa that it was not aware of any reports or rumours that might have triggered the UMA.
In May, the company was similarly slapped with an UMA after its share price and traded volumes rose sharply.
Toyo Ventures' share price, which closed at its 10-month high of RM1.19 on Tuesday — giving it a market capitalisation of RM139.34 million — is up 47 sen or 65% from 72 sen on Dec 20. In the same period, its warrants B have climbed 187% or 29 sen to 44.5 sen from 15.5 sen.