Sembcorp eyes acquisition of Cascal shares

Acquisition of 17,868,543 shares seen as a major milestone for Sembcorp in the fast-growing water sector.

Sembcorp Industries Ltd (Sembcorp) announced on Monday that its wholly owned subsidiary, Sembcorp Utilities Pte Ltd (Sembcorp Utilities) has entered into a tender offer and stockholder support agreement with Biwater Investments Limited (Biwater), to acquire Biwater's 17,868,543 shares of Cascal N.V. (Cascal) (representing approximately 58.4% of the outstanding common shares of Cascal), a New York Stock Exchange-listed company and leading provider of water and wastewater services, and to launch a tender offer to acquire all of the outstanding common shares of Cascal.

Tang Kin Fei, Group President & CEO of Sembcorp Industries said in a statement on Monday, "This acquisition will transform Sembcorp into a global water service provider and provide the platform for the Group to accelerate our growth in the future. We will have water and wastewater facilities in 31 operating locations in 11 countries around the world, and our water capacity in operation and under development globally will increase by 50% from four million to close to six million cubic metres per day."

Commenting on the transaction, Lawrence Magor, Chief Executive Officer, Biwater, said, "Following an extensive process to find our preferred buyer for our stake in Cascal, this transaction will allow Biwater to reduce significantly its debt, whilst providing Cascal with a new shareholder which is well placed to support the continued growth of the company."