SunCon-led consortium in negotiation to build Toyo Ventures' Vietnam power plant for US$2.2 bil

• The agreement sets out the framework for negotiations and discussions between the parties to establish the detailed terms and conditions about the contractor's performance in design, engineering, procurement, manufacture, supply, construction, erection, testing and commissioning of the electric generation facility.

KUALA LUMPUR (Dec 28): Toyo Ventures Holdings Bhd's units have entered into an interim agreement with a consortium led by Sunway Construction Group Bhd (SunCon) to negotiate details for the consortium to undertake a US$2.2 billion (RM9.73 billion) job for the development of a 2,120 MW coal-fired power plant in Vietnam.

The agreement sets out the framework for negotiations and discussions between the parties to establish the detailed terms and conditions about the contractor's performance in design, engineering, procurement, manufacture, supply, construction, erection, testing and commissioning of the electric generation facility.

Toyo Ventures owns the project through two wholly owned subsidiaries, namely Toyo Ink Group Bhd and Song Hau 2 Power Co Ltd.

The other member of the consortium with SunCon is Power Engineering Consulting Joint Stock Co 2, a subsidiary of Vietnam state-owned Vietnam Electricity.

Toyo Ventures said the interim engineering, procurement and construction (EPC) agreement will be terminated if the EPC contract is not executed by the parties within six months.

"The interim EPC agreement demonstrates the commitment of the owner (Toyo Ink and Song Hau 2) to fulfil the requirements of the BOT (build-operate-transfer) contract and sourcing project financing for the power plant project so that ground works at the project site can commence without further delay," said Toyo Ventures in a stock exchange filing on Wednesday (Dec 28).

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

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

In its Dec 29, 2020 stock exchange filing, Toyo Ventures said the project would have a total land area of 117.39 hectares and the estimated cost was approximately US$3.23 billion.

Subsequent to the announcement, shares of Toyo Ventures went on a steep rally, rising nearly four times from 99.5 sen on Dec 29, 2020 to RM3.87 less than a month later on Jan 19, 2021, before trending downwards to as low as 41.5 sen in May this year.

The counter has been regaining some ground in the past few months, before it spiked 23% to RM1.19 on Tuesday (Dec 27), marking its biggest single-day gain in over seven months.

Shares of Toyo Ventures, which have fallen 32% year-to-date, dropped 23 sen or 19.33% to settle at 96 sen on Wednesday, giving it a market capitalisation of RM102.7 million.

SunCon, on the other hand, closed one sen or 0.65% higher at RM1.55 on Wednesday, valuing the group at RM2 billion.