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Web Exclusive | September 2017

Sembcorp to gain 100 per cent stake in Indian RE business

Sembcorp Industries (Sembcorp) announced that its wholly-owned subsidiary Sembcorp Utilities has entered into an agreement to acquire IDFC Private Equity Fund III (IDFC)’s remaining stake in Sembcorp Green Infra (SGI), for Rs 1410.2 crore (approximately $301 million); making Sembcorp the sole owner of SGI.

Neil McGregor, Group President & CEO, Sembcorp Industries said, “Reaffirming our commitment to a long-term presence in India, the deal will allow us to drive SGI’s growth as the 100 per cent owner, and increase our investment in a wind and solar generation portfolio that strongly complements our thermal power assets in the country. Strengthening our investment in renewables will also help us stay abreast of advances in greener power generation, and will enable us to deliver electricity to our customers in an increasingly sustainable manner.”
Pursuant to the prevailing shareholders’ agreement between the parties, Sembcorp Utilities has exercised its contractual right to acquire IDFC’s remaining shares in SGI. The consideration for the acquisition was agreed between the parties based on, amongst others, comparable market valuations, and an assessment of SGI’s assets and business prospects.

Vipul Tuli, CEO & Country Head, Sembcorp India, added, “With the far reaching energy reforms and electrification under way in India, there is a demand for both renewable and thermal power in the country. Sembcorp’s acquisition of IDFC’s stake in SGI strengthens our position as a reliable provider of clean and low cost power to support India’s growing energy needs.”

SGI has close to 1,200 MW wind and solar power capacity in operation and under development. As at end-2016, the net asset value and net tangible asset value at SGI level were S$427.6 million and S$426.9 million respectively. The net profit at SGI level for the 12-month financial period ended December 31, 2016 was approximately S$39.0 million.

This acquisition will be funded through a mix of internal funds and borrowings, and payment will be settled in Indian rupees. Completion of the deal is expected to take place in the first quarter of 2018.

Save for their respective shareholdings in Sembcorp, no director or controlling shareholder of Sembcorp Industries had any interest in this transaction.

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