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Dear DK 66,

No idea why I cannot post in the JAKS comment page hence I post it in my blog.

Be realistic, with Equity of USD 470 million and Loan of USD 1.4 billion. You expect EVN Vietnam (a state owned power producer and distributor to end users) to guarantee a profit of USD 1.5 cents per Kwh (with Coal cost pass thro’ with certain specified efficiency) and with Capacity payment to take care of JV’s USD 1.4billion loan interest and  fixed depreciation and fixed O&M expenses?

With capital of USD 470 million and payment of USD 120 million for 25 year is equal to IRR of 25.4%.This is almost like AhLong rate.

Note: Vietnam government encourage foreign capital in IPP (BOT) is for the fact that Vietnam Bank reserve do not have enough foreign reserve to lend money to invest in Capital intensive (USD) power plant. It almost likes China when Mr. Deng opened up China domestic economy for foreign capital.

Thank you



Dear all,

What is equity accounting?

A 100% equity holding is called wholly owned company. Equity above 50% and below 100% is called subsidiary company. Equity between 20-50% is classified as associated company but SC allow between 10-20% as associate company provided you have management control. Less than 10% is called financial assets at fair value through profit and loss.

For wholly owned and subsidiary companies, all revenue, assets is recognized in the book with Profit for the financial year then divided into:  Attribute to Owners of the company and Non-controlling interest.

For JAKS:

Profit/(Losses) for the period end 31th December 2018: RM (46,798,000)

Attribute to: Owner of the company: RM 15,121,000

Non-controlling interest: RM (61,929,000)

So please attend AGM and ask who are the 49% equity holders and are they able to top up the (51%: 49%) JV Company’s losses. (For the 50 million LTA losses to Star will 49% equity holders top up their fair share of losses)



For associate companies: No revenue recognized. Associate Assets at cost and goodwill.  P&L recorded as share of Profits less Losses of associate companies. And in Cash Flow statement this so called accounting profit will be deducted from operating cash flow but dividend received from associate companies will be recorded as cash flow from investing activities.

For INSAS: Period end 30th June 2018.

Associated companies recorded as non-current assets: RM 357,628,000 (INSAS owned 19.1% of Inari (about 600 million Inari share), 12.2 % Hohup, 43.3 % Melium, 40% Winfields + others)

Share of Profit less loss of associate companies: RM 50,365,000

Cash flow from investing activities: Dividends received RM 49,590,000



JAKS with 30% equity in Vietnam IPP, JAKS can only equity account so called accounting share of profit form associates company which has to be deducted from operating cash flow and only dividend received add into cash flow from investing activities. If China partner play out JAKS with excuse to accumulate cash reserve for new green energy investment in Vietnam and no dividend for the next 5 year what can JAKS do. None of JAK’s projects in Malaysia are profitable or generating positive cash flow. With new PH government insist on open tender what is the prospect of JAKS in Malaysia?



Thank you.

P/S: For 25 years BOT; it mean after 25 years all the plant equipments and land return to Vietnam state. The EVN Vietnam will take over and run the plant if it is still efficient and economical to run it, otherwise JV will need to de-commission and dismantle all the plant equipments.

https://klse.i3investor.com/blogs/Sslee_blog/202254.jsp
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