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Oracle Power shares boosted 20% by power plant project go-ahead
Oracle Power's shares jumped over 20% on Friday after the company's Chinese partner formally approved moving forward with its plans to proceed with development of its Thar power station project in Pakistan.
Sichuan Provisional Investment Group (SCIG), which is the major party in the proposals due to a 78% holding, will proceed with the plans subject to approvals and licences from the governments of China and Pakistan and routine due diligence
Oracle Power is working with SCIG and fellow Chinese state-owned enterprise PowerChina International Group following the signing of a memorandum of understanding between the companies concerning the project in the south eastern Sindh Desert Province.
Shahrukh Khan, chief executive of the AIM-listed company, said: "I am delighted to announce the approval of the SCIG Board to proceed with the Project. Since signing the MOU in November 2017, all parties have worked hard to advance the Project. We now enter into an exciting new stage in Oracle's evolution."
The gross project cost is estimated at $1.6bn, with the Chinese parties exclusively responsible for the sourcing of financing. The project has a proposed debt to equity ratio of 75:25 with Oracle set to hold on to 12.5% equity.
A statement from Oracle Power said: "Given that the project has priority status in the China Pakistan Economic Corridor, the Oracle board expects the approval by the Chinese government to be in a timely fashion."
As of 1623 GMT, Oracle Power's shares were up 20.75% at 1.60p.