SembCorp Industries wishes to announce that its wholly-owned subsidiary, SembCorp Utilities Pte Ltd (SembUtilities), has entered into a conditional Share Purchase Agreement with Tractebel S.A. (Tractebel) to acquire all the shares held by Tractebel in these companies:

The total cash consideration is S$184 million which is inclusive of the settlement of all outstanding shareholder’s loans, accrued interests and other liabilities amounting to S$42 million.  The consideration was arrived at taking into account the discounted cash flows of the businesses and negotiated on a willing buyer, willing seller basis. 

The unaudited combined net tangible assets of these companies amounted to S$59 million at October 31, 2003.

Completion of the proposed acquisition is targeted to take place by December 1, 2003 upon fulfillment of stated conditions precedent. The conditions precedent primarily comprise of the approvals from the financiers of SUT Sakra and SembCogen and execution of the requisite documents.

Upon completion of the acquisition, SUT Sakra and SembCogen will become wholly-owned subsidiaries of SembUtilities. SembUtilities’ shareholding in SembGas will increase from 50 per cent to 70 per cent, with the remaining 30 per cent held by Seletar Investments Pte Ltd.

This acquisition will provide SembUtilities with full management control in SUT Sakra and SembCogen as well as majority control in SembGas. This will allow SembUtilities the flexibility to consolidate its profitable Singapore-based operations.

The acquisition will be funded through borrowings and internal sources.

Assuming that the acquisition was completed on January 1, 2002, SembCorp Industries’ proforma EPS for 2002 would have been 9.26 cents instead of 9.52 cents and the proforma NTA per share as at December 31, 2002 would have been 76.13 cents instead of 80.73 cents. 

The fall in proforma EPS was largely due to the increase in the share of SembCogen’s losses that were made in FY2002 under the old electricity market rules. However, as SembCogen has performed profitably since January 1, 2003, the proforma effect of the acquisition on EPS is positive.

Therefore, assuming that the acquisition was completed on January 1, 2003, SembCorp Industries’ proforma EPS for first nine months of 2003 would have been 0.44 cents higher at 13.14 cents instead of 12.70 cents and the proforma NTA per share as at September 30, 2003 would have been 84.17 cents instead of 88.77 cents.

None of the directors or controlling shareholders of the Company has any interest in the transaction.

By Order of the Board
Linda Hoon Siew Kin
Group Company Secretary
November 21, 2003