Sembcorp Completes Divestment Of Engineering & Construction Business

Singapore, Oct 17, 2006

SembCorp Industries Ltd (“SembCorp”) refers to its announcement of June 2, 2006, on its sale of an 88% stake in SembCorp Engineers and Constructors Pte Ltd (“SembE&C”) to Punj Lloyd Pte Ltd (“Punj Lloyd”). Further to this earlier sale, SembCorp has today divested its remaining 12% stake in the former SembE&C, now known as Sembawang Engineers and Constructors Pte Ltd (“SEC”), to Punj Lloyd.

This transaction followed the exercise of a call option granted to Punj Lloyd by SembCorp on June 2, 2006. The consideration amount for the option shares of S$4.9 million, represents a pro-rated 12% of the total agreed consideration for 100% of the SembE&C shares per the terms of the Sale & Purchase Agreement (“SPA”) executed on 2 June 2006, plus some accruals. SembCorp has also paid Punj Lloyd a sum of S$1.8 million, reflecting the differential in the net tangible asset value of SembE&C between 31 May 2006 and 30 April 2006, as provided for in the SPA.

As part of the transaction, SEC has also repaid a term loan of S$15 million plus accrued interest, extended by SembCorp to SembE&C. 

With the completion of this divestment, SembCorp ceases to have any interest in SEC. This transaction is not expected to have any material impact on SembCorp’s earnings per share and net tangible assets for the year ending 31 December, 2006.

By Order of the Board
Kwong Sook May (Ms)
Company Secretary

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NG Lay San (Ms)                              
Senior Manager
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About SembCorp Industries

SembCorp Industries Ltd is a leading utilities and marine group. The Group provides centralised utilities & energy to industrial customers in Singapore, the United Kingdom, Asia and the Middle East. It is a global leader in marine & offshore engineering and also a provider of environmental management services in the region.

SembCorp Industries has total assets of S$6.9 billion and employs more than 8,000 employees.

Listed on the main board of the Singapore Exchange, SembCorp Industries is a component stock of the Straits Times Index and several MSCI indices.

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