Sembcorp Industries drops plan to sell its waste-management business

Janice Lim

Published Tue, Jul 25, 2023 · 06:10 PM

Workers sorting out waste at SembWaste, the waste-management unit of Sembcorp Industries. PHOTO: BT FILE

ENERGY company Sembcorp Industries has decided not to sell its waste-management business and its energy-from-waste plant, it announced in a bourse filing on Tuesday (Jul 25).

It had opened talks on divesting from SembWaste and the plant, but that process has now been terminated.

Sembcorp Industries had confirmed on Jun 5 that it was exploring a potential sale of these assets about a month after Reuters reported that United States private-equity group KKR and Australia’s Macquarie Asset Management were among potential bidders for them.

Shares of the company hit an eight-year high of S$4.73 the day after the Reuters report in May, though it eventually traded lower; it closed at S$4.66 after the group said in a May 10 bourse filing that there was no definitive deal to sell its waste-management unit.

Shares closed 2.9 per cent higher at S$5.34 after its Jun 5 filing confirming the report and announcing that discussions had begun. Sembcorp said that day that the potential sale of SembWaste and the energy-from-waste plant was part of “ongoing strategic initiatives to maximise shareholder value”.

HSBC was the appointed financial adviser for the potential sale, and preliminary discussions with selected parties had begun.

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The arbitration is not expected to have a material impact on the company's earnings per share or net tangible assets per share.

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Sembcorp says discussions for the potential sale of Sembwaste are still preliminary and there is no certainty that a transaction will materialise.

Sembcorp exploring sale of waste management unit; early talks started with selected parties

Sembcorp Industries' statement comes in response to a Reuters article about the potential sale of the group's waste and recycling management unit SembWaste.

Sembcorp says no definitive deal to sell waste management unit; stock hits 8-year high

SembWaste is one of three public waste collectors appointed by Singapore’s National Environment Agency to provide waste and recyclable collection services to residential, schools and trade premises in the city-state, according to its website.

KKR, Macquarie eyeing Singapore’s waste management firm SembWaste: sources

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With the potential divestment terminated, Sembcorp said in its Tuesday bourse filing that it will continue to review its portfolio to ensure strategic fit and maximise shareholder value.

Shares of Sembcorp Industries closed flat on Tuesday at S$5.65.

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