Friday, December 9, 2011

Toyo Ink to fund US$2.5b Vietnam power plant from project capital, borrowings

KUALA LUMPUR (Dec 9): TOYO INK GROUP BHD [] plans to finance the US$2.5 billion coal-fired power plant power plant in Vietnam from a corporate exercise and also through borrowings.

Since the project involved a massive capital outlay, the company said on Friday it would consider raising part of the project capital from a corporate exercise and funding the balance via borrowings.

Toyo Ink said it would also seek equity partnerships to incorporate a joint venture company in Vietnam, adding this might involve changes in the company's existing corporate structure, capital management and financial risk management.

The company was responding to a query from Bursa Malaysia Securities on the proposed investment project.

Toyo Ink also said the power purchase agreement, implementation agreement and the developing and expanding cooperation framework had yet to be finalised.

It share price closed 10 sen lower at RM1.67 as investors were concerned its recent price surge was overdone as returns on investment in the power plant would be longer.

The Edge FinancialDaily reported on Friday Toyo's share price has benefited from the letter of approval it received from the'' Vietnamese government for'' the power plant, but realising the earnings may be a long way off.

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