Toyo Ventures’ shares extend fall on termination of Vietnam power plant project

KUALA LUMPUR: Shares in Toyo Ventures Holdings Bhd extended their losses from the previous session, slumping 16.5% in early Friday trade on news its power plant project in Vietnam had been terminated.

At 10am, the share price of the premium printing ink and masterbatch for packaging industry player was 17 sen lower at 89 sen a share after 14.17 million shares changed hands.

It had announced in a filing with Bursa Malaysia yesterday that its wholly-owned subsidiary, Song Hau 2 Power Company Ltd (SH2P), had received a letter from the Ministry of Industry and Trade of Vietnam (MOIT), stating that the 90-day period since the issuance of the “Notice of Intention to Terminate” to the group had expired.

However, SH2P still had not remedied the financial arrangement for the project, which resulted in the effective termination of the build-operate-transfer (BOT) contract for the project by MOIT.

TA Securities Research said the news of the termination of the project came as a surprise as it had anticipated an extension of the due date following the US$980mil financial facility that Toyo Ventures secured in June 2024, which could potentially cover 70% of the SH2’s invoice amount.

At this time, Toyo Ventures is evaluating the implications of the notice and will be seeking legal advice to explore appropriate actions and remedies as per the terms of the BOT contract.

“As the company navigates through this phase, any significant developments concerning the notice and/or the project will be promptly communicated through subsequent announcements,” it said in its announcement.

SH2P, a wholly owned subsidiary of Toyo Ink Group Bhd (TIGB), was incorporated in December 2020 in Vietnam to undertake the development of 2×1,060 MW coal-fired thermal power plant project in Song Hau Power Complex in Hau Giang Province, Vietnam.

Meanwhile, shares in Sunway Construction Group Bhd (SunCon) were slightly lower on Friday as its engineering, procurement, construction and commissioning (EPCC) job for the SH2P project would not proceed as planned.

At the start of trading, the shares of the construction firm shed three sen or 0.73% to RM4.10 apiece on low trading volume as investors reacted to what appears to be the scuttling of the US$2.4bil construction contract that a consortium comprising Sunway Construction and Power Engineering Consulting Joint Stock Company 2 had secured from Toyo Ventures.

However TA Securities said there will not be any material impact on Sunway Construction’s earnings given the EPCC works had yet to start, while the job is not a part of its orderbook replenishment target for the year.

“Looking ahead, we believe SunCon could allocate its resources to focus on the growing advanced technology project (ATP) field, including data centres and semiconductor assembly and tester factories.

“Additionally, the potential rollout of more mega infrastructure projects in Malaysia presents further opportunities, bolstering the group’s earnings visibility,” it said in a company update.

TA Securities maintained its “buy” call on SunCon and target price of RM4.46.