ENERGY and urban development company Sembcorp Industries on Friday (Nov 8) announced that it intends to sell its wholly owned unit Sembcorp Environment to SBT Investment 2 for S$405 million.
Sembcorp Industries and SBT Investment 2, which is wholly owned by Indonesia-listed integrated energy company TBS Energi Utama, on Friday entered into a share purchase agreement for the entire issued and paid-up share capital of Sembcorp Environment and its subsidiaries, SembWaste and Sembcorp Enviro Services.
Sembcorp Environment is an integrated waste management services provider involved in the processing, collection and recycling of industrial, commercial and municipal solid waste.
The proposed disposal of Sembcorp Environment was attributed to Sembcorp Industries’ intention to focus on growth in the energy sector, following its 2024 to 2028 strategic plan to accelerate renewables growth and drive the energy transition.
The consideration of S$405 million represents a 43 per cent premium over the book value and net asset value of Sembcorp Environment and its units as at Jun 30, after taking into account the estimated pre-completion dividend to be distributed from this group.
Sembcorp Industries said that the sum was mutually arrived at after arm’s length negotiations, on a “willing buyer, willing seller” basis. The portfolio of the target companies, and its capabilities in the full value chain – from waste collection, transport, handling, treatment and recycling to producing energy from waste – were also considered in the deal.
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The proposed transaction is subject to agreed-upon completion accounts adjustments as at the deal’s closing date. It is also conditional on JTC Corporation and Singapore’s National Environment Agency granting their consent, as well as TBS obtaining requisite approval from its shareholders.
The conditions are to be fulfilled no later than 12 months from the date of the agreement, unless otherwise agreed between Sembcorp Industries and SBT Investment 2.
SBT Investment 2’s parent company TBS manages a waste management portfolio in Singapore and Indonesia, as well as owns and operates Asia Medical Enviro Services, which specialises in biohazardous and medical-waste treatment services.
To ensure continuity, TBS has agreed to retain the management and staff of the Sembcorp Environment group following the completion of the proposed transaction, which is expected to be done by the first half of 2025.
Sembcorp Industries’ shares ended Friday unchanged at S$5.01, before the announcement.
