Singapore-based Sembcorp Industries on Monday (September 5) said its wholly-owned subsidiary Sembcorp Utilities (SCU) has sold its entire 100 percent stake in Sembcorp Energy India Ltd (SEIL) to Tanweer Infrastructure Pte Ltd for approximately Rs 11,700 crore (S$2.1 billion).

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SEIL is one of the largest independent power producers in India, operating two supercritical coal-fired plants, totalling 2.6GW.

The proposed sale will result in the deconsolidation of SEIL from Sembcorp, with Tanweer Infrastructure becoming the sole shareholder of SEIL on completion. Tanweer Infrastructure will settle the final consideration via a deferred payment note provided by SCU.

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The sale of SEIL will bring about a reduction of Sembcorp’s greenhouse gas emissions intensity from 0.51 tCO2e/MWh (tonnes of carbon dioxide equivalent per megawatt hour) to 0.32 tCO2e/MWh.

Sembcorp would have achieved its 2025 target of reducing its GHG emissions intensity to 0.40 tCO2e/MWh ahead of time. The company’s absolute GHG emissions will also reduce from 26.2 million tCO2e to 10.4 million tCO2e.

Upon completion of the sale, 51 percent of Sembcorp's energy capacity will be renewable energy, up from 43 percent. Sembcorp will have an energy portfolio of 14.0GW, with 7.1GW of renewable energy capacity comprising solar, wind and energy storage globally.

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The purchase consideration, at S$2.1 billion, is at an implied price/book multiple of 1.0 times. Sembcorp believes shareholder value will be preserved through the proposed sale.

The interests of important stakeholders such as SEIL’s existing power distribution customers and end users, employees, lenders as well as the wider Indian power system remain a high priority. The proposed sale is structured to ensure the continuation of the current mode of management and operations at SEIL.

Tanweer Infrastructure is indirectly owned by a consortium led by Oman Investment Corporation S.A.O.C. in partnership with the Ministry of Defence Pension Fund, Oman, one of Oman’s largest pension funds, with significant investments across power and infrastructure, and Dar Investment SPC.

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OIC is a leading Omani private equity investment company with a strong track record of investments in energy and infrastructure projects, real estate, logistics, healthcare as well as asset and project management services.

To ensure continuity of the highest standards of reliability, operational efficiency and best practices in the management of SEIL’s supercritical plants, Sembcorp will continue to render technical advisory services to SEIL through a technical services agreement. SEIL’s existing operations team will continue to be employed under the new ownership of Tanweer Infrastructure.

Wong Kim Yin, Group President and CEO of Sembcorp, said, "The sale of SEIL accelerates the transformation of Sembcorp’s portfolio from brown to green, while protecting the interests of all stakeholders."

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Kalat Al Bulooshi, CEO of OIC, on behalf of Tanweer Infrastructure said, "We are glad to acquire this world-class asset, serving essential energy to the community."

(Edited by : Shoma Bhattacharjee)