LONDON (Alliance News) – All Asia Asset Capital Ltd said on Thursday it is likely to see a “very substantial decrease” in the value of its stake in Andaman Power & Utility Company Ltd, after its economic interest was in a power plant project was diluted by a power purchase agreement.
All Asia Asset, which has a 7.0% interest in APU valued at GBP4.3 million at June 30, said a review of its existing investments has found APU’s effective interest in a project company intending to construct a power plant in Myanmar is likely to be “substantially diluted”.
In September 2014, All Asia Asset announced APU entered into an agreement over the proposed power plant with the government of Myanmar. Subsequently, in September 2016, APU became majority-owned by United Power of Asia Public Company Ltd.
All Asia Asset said it has found a power purchase agreement underlying the proposed construction has been signed between a company 99% owned by United Power of Asia and a Myanmar-government owned utility, which is responsible for power generation in the country.
All Asia Asset said the agreement appears to leave United Power of Asia as the main beneficiary of the power purchase contract, with APU owning only 1% of the company which signed the agreement.
“Given the matters described above… the board believes that AAA’s effective interest in the power plant project is likely to be reduced to in the region of 0.07%,” said All Asia Asset.
“The board is investigating these events and is taking further steps to clarify the situation. In the absence of a resolution of these matters, the board believes that AAA may have claims against certain parties in respect of the above,” added All Asia Asset.
Source: London South East
