Sembcorp raises stake in Indian renewable business to 100%

The remaining units to be acquired will cost $301m.

Sembcorp has decided to acquire IDFC Private Equity Fund III's (IDFC) remaining stake in Sembcorp Green Infra (SGI) for $301m.

According to a press release, this will raise the Sembcorp's stake in SGI to 100%, making it the sole owner of the company.

"The consideration for the acquisition was agreed between the parties based on, amongst others, comparable market valuations, and an assessment of SGI’s assets and business prospects," Sembcorp said.

SGI is one of the largest renewable energy players in India. It currently holds 250 MW awarded through India’s first national wind power tender earlier this year.

Sembcorp Industries group president and CEO Neil McGregor said, “Buying IDFC’s stake in SGI reaffirms Sembcorp’s commitment to a long-term presence in India. The deal will allow us to drive SGI’s growth as the 100% owner, and increase our investment in a wind and solar generation portfolio that strongly complements our thermal power assets in the country."

SGI operates and develops almost 1,200 MW of wind and solar power capacity.

Currently, the net asset value and net tangible asset value at SGI level were $427.6m and $426.9m, respectively.

The acquisition will be funded through internal funds and debt and settled in Indian rupees.

Sembcorp expects the deal to be complete in 1Q2018.

The acquisition is also not expected to have an effect on company performance on the next quarter.