S$301M deal reaffirmed Singapore group’s commitment to India

Singapore’s Sembcorp Industries is set to increase investment in wind and solar energy in India following an agreement signed on 31 August to buy out the remainder share of its Sembcorp Green Infra (SGI).

Sembcorp subsidiary Sembcorp Utilities has entered into an agreement to acquire IDFC Private Equity Fund III (IDFC)’s remaining stake in SGI for Rs.1,410.2 Crores (approximately S$301 million). With this, Sembcorp will become the sole owner of SGI.

“Buying IDFC’s stake in SGI reaffirms Sembcorp’s commitment to a long-term presence in India,” said Neil McGregor, Group President & CEO of Sembcorp Industries.

“The deal will allow us to drive SGI’s growth as the 100% owner, and increase our investment in a wind and solar generation portfolio that strongly complements our thermal power assets in the country,” he said.

“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,” McGregor said.

Vipul Tuli, CEO & Country Head of Sembcorp India, elaboated, “With the far reaching energy reforms and electrification underway 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 is one of the largest renewable energy players in India with presence in across seven states in India. It was awarded 250 megawatts in India’s first national wind power tender earlier this year, reflecting the strength of its capabilities.

SGI has close to 1,200 megawatts of 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. fii-news.com