Chip Eng Seng has entered a deal to acquire Sembcorp Design and Construction (SDC) from Sembcorp Industries’ wholly owned subsidiary Sembawang Corp. for S$49.9 million, the two companies said in separate filings to SGX Wednesday.
SDC is a civil engineering and contracting firm qualified to tender for public sector contracts with unlimited tender sums, Chip Eng Seng said, noting it has a track record of infrastructure projects. The orderbook for SDC’s commercial business is more than S$300 million, Chip Eng Seng said.
Ongoing projects include building the Thomson Line MRT’s Marina South Station tunnels and station, the Changi Water Reclamation Plant’s foundation works and the second package of works relating to the development of a three-runway system at Changi Airport, Chip Eng Seng said.
In Myanmar, SDC’s wholly owned subsidiary, SDCI (Myanmar), completed a project in 2018 related to a 225 megawatt gas-fired power facility, Chip Eng Seng said.
Chip Eng Seng said it has been considering expanding its construction business’s capabilities so it can participate in a broader range of tender projects, including civil and building infrastructure projects of a larger scale and/or higher value.
Sembcorp said it would retain SDC’s defense-related construction business, transferring it to wholly owned subsidiary Sembcorp Specialised Construction. Once the transfer is completed, SDC will no longer be part of the group, Sembcorp said.
The divestment is in line with the company’s strategy to reposition as a global integrated energy player, Sembcorp said, adding the deal is expected to be completed by year-end.