Sembcorp to more than double its stake in Senoko Energy

SINGAPORE – Sembcorp Industries is proposing an acquisition in Senoko Energy that could potentially more than double its interest in the local utility company, the group said in an April 2 exchange filing.

Its wholly owned subsidiary, Sembcorp Utilities, has signed a sale and purchase agreement to increase its interest in Senoko to a maximum 70 per cent, more than double its current 30 per cent stake in the company, according to its latest annual report.

The agreement, signed with KPIC Netherlands, Kyuden International and Japan Bank for International Cooperation (JBIC), aims for a stake of up to 57.1 per cent in the joint venture-owned company Lion Power, which holds a 70 per cent interest in Senoko.

Lion Power is owned by a joint venture comprising Marubeni Corp, KPIC Netherlands, Kyuden International and JBIC. Marubeni holds the remaining 42.9 per cent interest in Lion Power.

The proposed acquisition of up to 70 per cent of interest in Senoko is subject to pre-emption by Marubeni.

With a maximum purchase consideration of $144 million – comprising the purchase price of $137 million and a working capital adjustment of $7 million – the purchase will be funded through Sembcorp’s internal cash resources and/or external borrowings and is set to complete in the second quarter of 2025.

The Energy Market Authority has reviewed the proposed acquisition and has no objections, Sembcorp said.

The review took into consideration the commitments Sembcorp proposed to ensure fair market competition, including offering sufficient retail contracts to ensure consumers have competitive retail options, the company added.

Once completed, the proposed acquisition is expected to be accretive to Sembcorp’s earnings but will not have material impact on the group’s net tangible assets per share for the financial year ending Dec 31.

The company’s shares closed 2.5 per cent, or 16 cents, higher at $6.58 on April 2.

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