Source: VietstockFinance
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According to Dau Tu newspaper, on July 1, 2024, the Ministry of Industry and Trade issued Document No. 4579/BCT-DL to Song Hau 2 Thermal Power Joint Stock Company, announcing the termination of the BOT contract for the Song Hau 2 Thermal Power Project.
The BOT contract for the project was signed between the Ministry of Industry and Trade, Toyo Ink Group Berhad (investor), and Song Hau 2 Thermal Power Joint Stock Company (project enterprise) on December 29, 2020. However, the investor, Toyo, and Song Hau 2 have repeatedly failed to meet the financial terms of the contract.
Specifically, on December 2, 2022, the Ministry of Industry and Trade issued a document regarding Song Hau 2’s non-compliance with an important clause of the contract, as it had not resolved the issue of financial arrangement by the mandatory financial closing date, thereby constituting a “Project Development Breach.”
On November 9, 2023, the Ministry of Industry and Trade sent another document to Toyo and Song Hau 2 regarding the timeline and conditions for resolving the project’s financial arrangement. On April 1, 2024, the Ministry of Industry and Trade notified about Song Hau 2’s breach and their intention to terminate the contract.
After the 90-day period from the date of the Ministry’s notification of its intention to terminate, Song Hau 2 still failed to arrange the project’s finances. Therefore, the Ministry of Industry and Trade officially announced the termination of the project’s BOT contract in the latest document.
Over 5 million TV2 shares plunge
The Song Hau 2 Thermal Power Plant project is implemented in the form of a BOT contract in Chau Thanh district, Hau Giang province, with a designed capacity of 2×1,060 MW and a total investment of over $3 billion. This project is also considered crucial for TV2 – as the EPC general contractor, it was expected to bring significant potential for profit growth for the enterprise.
However, according to the Power Development Plan 8 (PDP8), the Song Hau 2 Thermal Power Plant is one of the five coal-fired power plants that are behind schedule and facing challenges in changing shareholders to arrange capital. The plan clearly states that the Ministry of Industry and Trade should work with investors in these projects and allow an extension until June 2024. If the projects cannot be implemented by then, they must be considered for termination in accordance with the law.
Contract signing ceremony for the Song Hau 2 Thermal Power Project. Photo: TV2
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Notably, at the 2024 Annual General Meeting of Shareholders, TV2 stated that the project had basically arranged the capital, after the investor, Toyo, signed with Eximbank Malaysia for a contract to provide $980 million in funding, along with a commitment of over $2.1 billion for the project afterward. “June 30 is the deadline to ensure the source of capital. In fact, there are some conditions that need to be met, including the most important indicator, which is the initial investment capital (First drawdown payment). I believe that the bank’s capital arrangement has far exceeded the project’s investment value,” said Mr. Nguyen Chon Hung, Chairman of the Board of Directors, at the meeting.
TV2: Song Hau 2 Project Basically Meets Capital Preparation
However, with the Ministry of Industry and Trade announcing the termination of the contract, it appears that the above capital arrangement deadline has not been met. Contacted by the media, a leader of TV2 said that the enterprise is also unclear about this matter and will provide feedback later.
After the news of the project’s contract termination, TV2 shares plummeted. In the last two sessions (July 2 and 3), the share price decreased by 1.15% and 1.48%, respectively. In the morning session on July 4, the share price hit the floor, with more than 5 million shares offered and none bought.
| Price movement of TV2 shares since the beginning of 2024 |
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