Shares of TV2, a construction consulting firm, have been on a downward spiral since the early hours of July 4th. By 10 am, the stock had plummeted to 43,450 VND per share, with a staggering over 5.1 million units being offloaded at the bottom price, equivalent to 7.5% of the company’s charter capital.
Prior to this drastic drop, TV2 had enjoyed a bullish run from May 15th to June 10th, surging 46% to peak at 53,100 VND. This upward momentum was short-lived, as news of a potential project halt loomed. TV2 closed the trading session on July 3rd at 46,700 VND.
The sell-off of TV2 shares came hot on the heels of the Ministry of Industry and Trade’s announcement to terminate the BOT contract for the Song Hau 2 Thermal Power Project with Song Hau 2 Power Company Limited. The BOT contract for this project was signed between the Ministry of Industry and Trade, Toyo Ink Group Berhad (the investor), and Song Hau 2 Power Company Limited (the project enterprise) on December 29, 2020.
This project, anticipated by Vietcap analysts to commence in early July 2024, was expected to generate a total revenue of VND 26,500 billion for the construction consulting firm (the project’s EPC contractor) during the period of 2024-2028. This figure accounts for 70% of the company’s total revenue forecast for the same period.
In light of the contract termination, Vietcap’s recent report revealed that despite Toyo Group’s initial disbursement of $120 million in FDP (the final condition to meet the FC deadline), the funds have not been transferred to SH2’s bank account in Vietnam due to pending approval from the State Bank of Vietnam. SH2 and Toyo Group are currently working with relevant parties to resolve this issue.
As per the termination notice from the Ministry of Industry and Trade, according to Clause 23.2 (b) of the BOT contract, the Ministry had issued Document No. 7756/BCT-DL dated December 2, 2022, notifying Song Hau 2 Power Company Limited of its failure to comply with an important clause of the BOT contract by not achieving the Mandatory Financial Closing Date as stipulated.
Since Song Hau 2 Power Company Limited failed to rectify the financial arrangement within the timeframe specified in Clause 23.2 (b) of the BOT contract, this constituted a “Project Developer Violation” as per Clause 23.2 of the same contract.
On November 9, 2023, the Ministry of Industry and Trade issued Document No. 7921/BCT-DL to Toyo Ink Group Berhad and Song Hau 2 Power Company Limited regarding the timing and conditions for resolving the project’s financial arrangement.
In accordance with Clause 23.4 of the BOT contract and following Document No. 7921/BCT-DL, the Ministry of Industry and Trade issued Document No. 2109/BCT-DDL dated April 1, 2024, notifying Song Hau 2 Power Company Limited of the “Project Developer Violation” and the intention to terminate the BOT contract.
The Song Hau 2 Thermal Power Plant project, implemented in Chau Thanh district with Toyo Ink Group as the investor, spans an area of 116.61 hectares, boasts a design capacity of 2,120 MW, and entails a total registered investment capital of VND 72,000 billion.
Nearly a decade ago, on August 1, 2013, Toyo Ink Group and the General Directorate of Energy (Ministry of Industry and Trade) signed a memorandum of understanding to develop the Song Hau 2 Thermal Power Project under the BOT format. The project’s first unit was expected to commence commercial operations in the second quarter of 2021, with the entire plant scheduled to be operational by the second quarter of 2022.
In December 2020, Toyo Ink Group signed a BOT contract with the Ministry of Industry and Trade and a PPA with EVN for the Song Hau 2 project. However, the project has yet to complete compensation and resettlement support for affected residents. According to Power Planning No. 8, the Song Hau 2 Thermal Power Plant is one of five coal-fired power plants facing delays and challenges in changing shareholders and arranging capital.
In early June 2024, Toyo Ink Group Berhad secured a loan agreement worth $980 million with Eximbank Malaysia for the Song Hau 2 Thermal Power Project to facilitate design, equipment procurement, construction, and operation of the project.
The Great TV2 Stock Dump: Over 5 Million Shares Plummet as Ministry Scraps Strategic Project Contract
The morning session of July 4, 2024, witnessed an intriguing development as the shares of TV2, a consulting firm specializing in power construction, took center stage on the HOSE (Ho Chi Minh Stock Exchange). With a staggering over 5 million shares left unsold, TV2’s stock performance captivated the market, leaving investors and traders alike wondering about the reasons behind this unusual scenario.
