South Korea’s Doosan Heavy Industries & Construction Co.’s nearly 1 trillion won ($940 million) deal to build a coal-fired power plant in the Philippines has been cancelled two years after it signed the initial contract with Redondo Peninsular Energy Corp. in October, 2016.

The top Korean power plant equipment maker said in a regulatory filing on Wednesday that its engineering, procurement, and construction (EPC) contract to build a coal-fired power plant for Redondo Peninsular Energy in the Philippines is no longer effective after the Filipino company terminated the 952.3 billion won contract and officially notified Doosan Heavy Industries & Construction its termination on Tuesday.

Shares of Doosan Heavy Industries & Construction lost 3 percent, or 450 won, to 14,700 won on Thursday from a day ago.

An unnamed official from Doosan Heavy Industries & Construction said that as the Philippines’ Energy Regulatory Commission has delayed approval for energy tariffs, the notice to proceed the plant’s construction has not been issued until the effective date of Dec. 31, 2017 for the agreement. The Korean company has been trying to continue the project by narrowing differences between the two parties via several rounds of negotiations, but it failed to reach an agreement.

Under the EPC contract signed by Doosan Heavy Industries & Construction with Redondo Peninsular Energy in 2016, the first of the two coal-fired power plant units was to be completed by the end of 2020 with the construction of both units due to begin last year.

After the cancellation notice, Doosan Heavy Industries & Construction has renewed fresh talks with the power company to seek for ways to kick off the construction against the sluggish global power industry.

Shares of Doosan Heavy Industries & Construction have been losing ground lately due to dwindling orders and growing concerns that nuclear phase-out policies at home and abroad would hurt the company’s sales.

In December, Seoul-based credit rating agencies including NICE Investors Service and Korea Investors Service lowered the credit rating of Doosan Heavy Industries & Construction by one notch from A- with a negative outlook to BBB+ with a positive outlook, reflecting such gloomy outlook on the company’s business.

To improve its financial health, Doosan Heavy Industries & Construction recently sold off its 42.66 percent stake in Doosan Engine.

By Woo Je-yoon and Lee Eun-joo

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