Sembcorp to fully own India renewable energy business Sembcorp Green Infra

SEMBCORP Industries (Sembcorp) announced on Thursday that its wholly owned subsidiary, Sembcorp Utilities, has entered into an agreement to take over IDFC Private Equity Fund III's (IDFC) remaining stake in Sembcorp Green Infra (SGI), for 14.1 billion rupees (about S$301 million).

This will be funded through a mix of internal funds and borrowings, and the deal is expected to be completed in Q1 2018. With this acquisition, Sembcorp will become the sole owner of SGI, one of the largest renewable energy players in India. Sembcorp Utilities had previously increased its stake in SGI to 72 per cent for one billion rupees in August this year.

Said Neil McGregor, group president and CEO of Sembcorp Industries: "Buying IDFC's stake in SGI reaffirms Sembcorp's 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."

As at end-2016, SGI's net asset value and net tangible asset value were S$427.6 million and S$426.9 million respectively. For the financial period ended Dec 31, 2016, SGI's net profit was approximately S$39 million.

The effect of the acquisition on Sembcorp's net tangible assets per share and earnings per share is immaterial, assuming that the transaction had been effected as at Dec 31, 2016 and Jan 1, 2016 respectively.

Sembcorp Industries ended 0.67 per cent, or 0.02 point lower to close at S$2.96 on Wednesday.