Cavico Corp. (NASDAQ: CAVO),
a leading infrastructure development company based in Vietnam, today announced that its subsidiary, Cavico Vietnam, on March 31, 2010, received an investment license for the formation of Cavico Renewable Energy Joint Stock Company, or Cavico CRE. Cavico CRE’s main business will focus on developing renewable energy-related projects such as hydroelectric, wind power, solar energy, and biofuels.
Cavico CRE requires a total investment of $14 million. An initial investment of $4.2 million will be contributed within 90 days after receiving the investment license. The remaining $10 million will be contributed within three years following the initial start-up.
According the share structure, Cavico Vietnam will own 10%, or 2,400,000 shares and Cavico Transport, a subsidiary of Cavico Vietnam, will own 20%, or 4,800,000 shares of Cavico CRE. The founding partners plan to offer the remaining shares of Cavico CRE to outside investors.
“Cavico believes that our focus on renewable energy is a strategic move in the right direction for the Company,” comments Mr. Hai Thanh Tran, Cavico’s vice president. “We will continue to build upon our market-leading position with traditional engineering, construction and infrastructure projects, as well as invest in some select real estate projects, we believe that we can leverage our expertise and apply these skills towards building our renewable energy capabilities. We believe this will help us to broaden our investment opportunities and improve our future profit margins. Cavico CRE’s first project will be with the Cau Dat wind power plant, located in Lam Dong province.”
Currently, there are about twenty-five investors registered for licenses to build windpower plants, for up to 1000 MW, in the highlands of Vietnam, such as Binh Thuan, Ninh Thuan, and Lam Dong provinces. There is a 15 MW plant currently in operation in this highland region and Cavico Transport is the second enterprise that was issued a Windpower Investment License by Lam Dong People’s Committee.