The move could raise its interest in Senoko Energy to as much as 70%

 

[SINGAPORE] Sembcorp Industries is moving to raise its stake in energy supplier Senoko Energy that could potentially more than double its interest in the company. 

 

Its wholly owned subsidiary Sembcorp Utilities has signed a deal to boost its interest in Senoko to a maximum 70 per cent &ndash more than double its current 30 per cent stake in the company, as reflected in its annual report. 

 

The proposed acquisition will expand opportunities for the two companies to contribute to the energy transition and deliver sustainable, reliable energy, Sembcorp said in a Wednesday (Apr 2) bourse filing.

 

It follows Sembcorp Utilities&rsquo earlier acquisition of the 30 per cent stake in Senoko, completed in November 2024 for a S$96 million equity consideration, which made Senoko an associate company of Sembcorp. Then, Sembcorp said the acquisition would &ldquo complement (its) current portfolio of energy assets&rdquo .

 

The agreement, signed with KPIC Netherlands, Kyuden International and Japan Bank for International Cooperation (JBIC), aims to acquire a stake of up to 57.1 per cent in 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 Corp 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 Corp.

 

With a maximum purchase price of S$144 million, comprising the purchase price of S$137 million and a working capital adjustment of S$7 million, the purchase will be funded through Sembcorp&rsquo s internal cash resources and/or external borrowings and is set for completion in the second quarter of 2025. 

 

The Energy Market Authority has reviewed the proposed acquisition and has no objections to it, Sembcorp said. The review took into consideration the commitments proposed by Sembcorp to ensure fair market competition, which includes offering sufficient retail contracts so that consumers have competitive retail options, the company added.

 

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