[Courtesy of Samsung Engineering]
Samsung C&T and Samsung Engineering, the two units of South Korea's largest conglomerate Samsung Group, has finally pulled out of a coal power plant project in Kazakhstan due to difficulty in raising funds.
The two companies said in a regulatory filing that they officially cancelled a contract because they failed to win an order for the start of construction in Balkhash, near the financial capital of Almaty.
The two Samsung companies held a stake worth $1.25 billion each in the first independent power production project in Kazakhstan. A joint venture was formed and shared equally by the state-run Korea Electric Power consortium and Samruk Energy of Kazakhstan.
A formal contract was signed in 2014, but construction has been delayed due to differences over financing because the Kazakh government refused to provide guarantees on purchasing electric power.
The project was put on hold in September last year after 19 percent of construction was completed. Samsung C&T said it has cancelled the contract to minimize losses.
Samsung C&T has already written off losses of 2.6 trillion won in last year's account settlement, reflecting potential losses that included contingent liabilities in the Kazakh project.
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
