Sembcorp Industries enters non-binding deal to acquire rest of SEIL it doesn’t already own

Electricity advertisement for Sembcorp Industries. Note: Photo taken pre-CovidElectricity advertisement for Sembcorp Industries. Note: Photo taken pre-Covid

Sembcorp Industries’ wholly owned subsidiary Sembcorp Utilities has entered a non-binding deal to acquire the remaining 5.95 percent of Sembcorp Energy India Ltd. (SEIL) it doesn’t already own from its local Indian partner Gayatri Energy Ventures Pte. Ltd. (GEVPL), the utility company said in a filing to SGX Wednesday.

The purchase price is around 4.07 billion rupees, or around S$77 million, in cash, with the potential for future earn-outs for GEVPL if SEIL achieves certain milestones, Sembcorp Industries said.

SEIL is a leading independent power producer in India and it focuses on a growing portfolio of clean energy assets, the filing said. SEIL’s portfolio has both thermal and renewable energy assets of more than 4,300 megawatts, the filing said.

“The proposed acquisition will allow Sembcorp to have the flexibility as sole owner to evaluate and pursue a full range of growth opportunities in the renewables segment, while at the same time seeking the right equity window to list its India business or to pursue other capital recycling options,” the company said.

Sembcorp Industries said it would fund the deal via a mix of internal funds and borrowing, with completion expected by year-end, subject to approval by shareholders of Gayatri Projects Ltd.

Negotiations on a definitive deal are still on-going, Sembcorp said.

GEVPL is a wholly owned subsidiary of Gayatri Projects Ltd., the filing said.