KUALA LUMPUR (July 12): Toyo Ventures Holdings Bhd (KL:TOYOVEN) said that the US$980 million (RM4.58 billion) financing facility it secured from i-Power Solutions Pte Ltd for the Song Hau 2 thermal power plant project is no longer applicable.

This came one week after Toyo Ventures confirmed that the project has been terminated by the Vietnamese government.

In a filing to Bursa Malaysia on Friday, Toyo Ventures said that its wholly-owned subsidiary, Song Hau 2 Power Company Limited (SH2P), received an email on July 9 from i-Power Solutions’ legal counsel, citing the project’s termination as the reason for rendering the equipment facility irrelevant.

“Any significant developments regarding the project will be promptly communicated through subsequent announcements,” the company added.

The equipment financing facility announced by Toyo Ventures on June 7 aimed to finance up to 70% of the equipment procurement costs for the engineering, procurement, commissioning, and construction (EPCC) works of the thermal power plant project in Vietnam.

A report in the May 13-19, 2024 edition of The Edge Malaysia weekly had earlier highlighted Toyo Ventures’ challenges in securing sufficient financing for the project before the deadline.

The project’s initially exclusive mandated lead arranger, Export-Import Bank of Malaysia Bhd, was appointed in November 2023 to arrange the proposed syndicated financing facilities of up to US$2.42 billion for the project.

However, the build-operate-transfer (BOT) contract for the thermal power plant project was subsequently terminated by the Vietnamese government, with SH2P receiving a letter from Vietnam’s Ministry of Industry and Trade (MOIT) on July 1, indicating that despite the 90-day termination notice, SH2P had not resolved the necessary financial arrangements for the project.

Toyo Ventures said it is currently assessing the implications of the notice and will seek legal advice to explore suitable action and remedies under the terms of the BOT contract.

Shares in Toyo Ventures closed two sen or 2.38% lower to 82 sen on Friday , giving the group a market capitalisation of RM108.98 million. The counter has plunged by 37.88% since the beginning of the year.