Sembcorp to pay USD 59m for remaining stake in Indian arm

Singapore-based energy group Sembcorp Industries Ltd (SGX:U96) will pay about INR 4.06 billion (USD 59m/EUR 54m) in cash for the 5.95% stake it does not own yet in Sembcorp Energy India Ltd (SEIL), its Indian energy unit.

The company's subsidiary Sembcorp Utilities and its Indian partner Gayatri Energy Ventures Pte Ltd have signed a non-binding term sheet that outlines the transaction. Following its completion, Sembcorp will own 100% of SEIL. The Indian energy company's portfolio consists of thermal and renewable energy assets with a total capacity surpassing 4.3 GW.

The proposed deal will enable Sembcorp to assess and pursue growth opportunities in the renewable power sector, while also giving it an opportunity to list the business or take advantage of other capital recycling options.

In addition to the acquisition price, when Sembcorp Energy India reaches certain milestones, Gayatri Energy Ventures, which is part of Gayatri Projects Limited (NSE:GAYAPROJ), will receive earn-outs.

Sembcorp will finance the deal using internal funds and loans. The proposed transaction is expected to close by the end of 2019, subject to meeting certain conditions.

(INR 100 = USD 1.489/EUR 1.354)

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