Sembcorp Sells UK Water Business to Pennon Group

Sembcorp Industriessaidhas sold its water business in the UK for an enterprise value of £191.5 million

The company will get cash proceeds to the tune of £104.5 million (S$214 million) from the sale.

The development comes within a day of the company announcing the expansion of its energy business in China. Sembcorp is expanding its renewable energy business to Huanghua, Hebei province, with the development of two wind farms. Its proposal to build a 150-megawatt wind farm in Laoshibeihe has been approved by the Hebei Development and Reform Commission while another wind farm with 48 megawatts power capacity in Jiedijianhe commenced operation, the company said Wednesday in regulatory filing with the Singapore exchange.

Regarding the UK sale, its wholly-owned subsidiary there - Sembcorp Holdings Limited - which mainly operates a regulated municipal water business based in Bournemouth, sold the unit to Pennon Group PLC.

Pennon is a UK-based environmental utility infrastructure company and the parent company of South West Water Limited, which provides water and sewerage services for Devon, Cornwall and parts of Dorset and Somerset in the UK.

Sembcorp said the deal is expected to generate a net gain of £25 million (S$50 million) for the Group for the financial year ending December 31, 2015.

In China, the company will begin construction of the approximately RMB1.3 billion (S$0.3 billion) wind farm in Laoshibeihe this year, and its share of equity investment in this project will be around RMB 0.2 billion (S$45 million), which will be funded through a mix of internal and external borrowings. The project is expected to be completed by the second half of 2017. Sembcorp currently has a total of 446 megawatts wind power capacity in operation and under development in China.

Source: DealStreetAsia

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