Fri 6 Jul 2012
Filed under: Business / Trade
Thailand’s largest construction firm, Italian-Thai Development Pcl, is in talks with new investors to replace Max Myanmar Group in the $50 billion Dawei project in Myanmar, an Italian-Thai unit said on Friday.
Zaw Zaw, Max Myanmar’s owner, told Reuters this week his group would gradually withdraw from the port and industrial complex, adding to doubts about its viability.
“Four or five local investors in Myanmar have shown interest in investing in Dawei after Max Myanmar’s withdrawal. Italian-Thai is in talks with them,” Somchet Thinaphong, managing director of Dawei Development Corp, told reporters.
Italian-Thai, which is leading the project, was in the process of revaluing Max Myanmar’s investment and its 25 percent holding would be gradually whittled down if it did not inject more money into Dawei Development, Somchet said.
Italian-Thai was also seeking loans from Japanese investors to help finance the project, he added.
Italian-Thai has been struggling to find backing for the 250 sq km (97 sq mile) complex, which was planned to include a deep-sea port, steel mills, refineries a petrochemical complex and power plants, although Myanmar’s government has vetoed a coal-fired power station.
In April, Italian-Thai said it expected to conclude long-term financial plans for the Dawei project by the end of this year. It was seeking an initial $8.5 billion to finance infrastructure and utilities under the first phase of the project.
The company has said that by the end of 2015 it would open a $1 billion, four-lane highway to Thailand, a $1.2 billion deep-sea port plus infrastructure including a 400-MW power plant.
Somchet said Italian-Thai aimed to use liquefied natural gas (LNG) to fuel that power plant. He declined to say where it would come from.
Concern about the viability of the project has put pressure on Italian-Thai stock, which has lost 30 percent in the past 12 months, compared with a 10 percent rise in the main Thai index .
At the midsession break, the stock was down 0.65 percent, while the main index was 0.72 percent lower. (Reporting by Pisit Changplayngam; Writing by Khettiya Jittapong; Editing by Alan Raybould and Robert Birsel)