Sembcorp Industries - DBS Research 2022-09-06: Divestment Of SEIL; A Quantum Leap In Decarbonisation

Sembcorp Industries - Divestment Of SEIL; A Quantum Leap In Decarbonisation

Published:
SEMBCORP INDUSTRIES LTD (SGX:U96) | SGinvestors.ioSEMBCORP INDUSTRIES LTD (SGX:U96)
  • Sembcorp Industries (SGX:U96) is selling 100% of its shares in Sembcorp Energy India Limited (SEIL) that owns two coal-fired plant totaled 2,640 MW in India, to Tanweer Infrastructure Pte. Ltd. (the “Tanweer”).
  • - Read this at SGinvestors.io -
  • The consideration for the SEIL sale is INR117,338m (approximately S$2,059m), subject to certain adjustments. The base purchase price is 1.0x of SEIL’s book value as of 30 June 2022. Sembcorp is expected to register a small disposal gain of S$11m upon completion.
  • While power companies in India might have re-rated to above book valuation, transactions of thermal power plants remain at steep discounts to book. Hence, Sembcorp’s proposed divestment of SEIL at book is deemed commendable.
  • - Read this at SGinvestors.io -
  • DPN income (post tax) for Sembcorp is expected to be ~S$158m for 2022 on proforma basis, thus mitigating the loss of income from the two power plants, which were projected to be S$140-180m p.a. on a normalised basis.

Stable financial metrics post transaction

  • Read more at SGinvestors.io.




Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @ https://www.dbs.com/insightsdirect/.




Pei Hwa HO DBS Group Research | https://www.dbs.com/insightsdirect/ 2022-09-06



Read also DBS's most recent report:
2024-02-21 Sembcorp Industries - A Steady 2H23; Igniting The Renewable Spark.

Previous report by DBS:
2023-11-07 Sembcorp Industries - Powering Up The Energy Transition.

Price targets by 4 other brokers at Sembcorp Target Prices.

Listing of research reports at Sembcorp Analyst Reports.

Relevant links:
Sembcorp Share Price History,
Sembcorp Announcements,
Sembcorp Dividends & Corporate Actions,
Sembcorp News Articles





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