SBI Offshore diversifies into solar energy business

SBI Offshore Limited on Tuesday announced that it has entered into a joint venture agreement with GSS Renewables to pursue solar photovoltaic (PV) energy business.

GSS Renewables comes under Germany's Grass Group, which was founded in 1994 and has been involved in the development, engineering and installation of solar PV power systems and plants. To date, Grass Group has completed about 2,000 megawatts of PV projects.

Under the agreement, a joint venture company, Graess Energy Private Limited, will be incorporated in Singapore with an initial paid-up capital of US$100, divided into 100 ordinary shares, of which SBI Offshore and GSS Renewables will hold 51 shares and 49 shares respectively.

Graess Energy's business activities include design, engineering, construction, development, ownership, operation, maintenance and storage of PV projects.

With the declining growth rate of solar energy uptake in Europe, and with Asia-Pacific as the largest growing market for solar renewable energy, Grass Group will relocate its headquarters to Singapore this year, with Graess Energy serving as its headquarters.

SBI Offshore chairman John Chan told reporters at a media briefing that the company is eyeing PV projects in Japan, Kazakhstan, Thailand, the Philippines, the Middle East and more.

SBI Offshore's investment in Graess Energy will initially be funded by internal resources. As at Tuesday, the company is unable to ascertain whether the investment in Graess Energy will have any material impact on the earnings per share and/or net tangible assets per share of the group for the current financial year ending 2015, as it will depend on the number and scale of the PV projects undertaken by Graess Energy, SBI Offshore said in a statement.

The company is also negotiating on the injections of the assets of Grass Group into Graess Energy, including existing PV projects. "The expected acquisition of these assets and any subsequent PV projects secured by Graess Energy may lead to a new core business for the group," it said.

The company will seek shareholders' approval for the diversification into this new business.