State-owned Cambodian electricity company shortens contract with Asiatic Group subsidiary

Nisha Ramchandani

Published Sun, Feb 14, 2021 · 06:20 PM

A state-owned Cambodian electricity supplier is shortening the duration of a power purchase agreement that it has with a unit of Asiatic Group (Holdings).

Colben Energy (Cambodia) - which is an indirect 85 per cent subsidiary of Asiatic - has received a letter from Electricite Du Cambodge (EDC) to bring forward the term of the agreement to Aug 31 this year. "During two meetings with the official from EDC in January and February, EDC has informed Colben that based on goodwill and in good faith, EDC has extended the power purchase agreement term for Colben three times," engineering group Asiatic said in a filing to the Singapore Exchange on Thursday.

Under the agreement - which was last extended in May 2019 - Colben would have continued to supply electricity generated from its two 10 MW power plants in Phnom Penh and Sihanoukville for a three-year period ending April 30, 2022. The agreement also listed the minimum electrical amount that EDC needed to purchase, at 65 per cent of the contracted capacity.

EDC has agreed to continue to pay Colben at 65 per cent of the contracted capacity until end August this year after which Colben will cease operations and remove its property, goods and employees from the Sihanoukville Power Plant on or before June 30, 2021.

Asiatic's carrying value of the property, plants and equipment as at end Jan 31, 2021 stood at about S$4.2 million, which will be potentially impaired. The final impairment amount needs to be verified with external auditors, and will be released during the results announcement after March 31, 2021.

This is expected to have a negative effect on the earnings per share or the net tangible assets per share of the group for the financial year ending March 31, 2021.