Sembcorp’s Joint Venture, Sembcorp Salalah Power & Water Company, Successfully Closes IPO in Oman
September 26, 2013
Sembcorp Utilities, 35% owned by Oman Investment Corporation (OIC) and 5% owned by Bahrain-based BDCC Investment Company. Post-listing, Sembcorp Utilities now holds a 40% stake in Sembcorp Salalah, while OIC and BDCC hold 21.9% and 3.1% respectively. Following the IPO, Sembcorp will recognise a total gain of approximately S$117 million, comprising a S$37 million gain on its 20% equity interest sold through the IPO and a fair value gain of S$80 million on re-measurement of its remaining 40% equity interest in the company.
Tang Kin Fei, Sembcorp’s Group President & CEO, said, “The IPO of Sembcorp Salalah is a significant milestone in the company’s development and we are pleased to see it embark on this next stage of growth. The Salalah IWPP will continue to play a major role in meeting the region’s growing power and water demand. As a project partner and long-term shareholder of the company, we look forward to serving the essential power and water needs of the region for many more years to come. At the same time, Sembcorp is committed to growing our business in Oman. For instance, we have embarked on a second project in the country, to develop centralised utilities facilities in Duqm.”
The US$1 billion Salalah IWPP was successfully completed and has been in full commercial operation since May 2012. The facility consists of a gas-fired power plant with a contracted power capacity of 445 megawatts and a reverse osmosis seawater desalination plant with a contracted water capacity of 15 million imperial gallons (69,000 cubic metres) per day. It provides power and water under a 15-year power and water purchase agreement with the Oman Power and Water Procurement Company, which is wholly-owned by the Government of Oman.
The Salalah IWPP was Sembcorp’s first facility in Oman. The project was secured in 2009, following a competitive bidding process involving global utilities players. Sembcorp has now embarked on its second project in Oman with a joint venture to develop centralised utilities facilities in the Duqm Special Economic Zone. Sembcorp has also owned, operated and maintained the Fujairah 1 Independent Water and Power Plant in the UAE – one of the world’s largest operating hybrid desalination plants – since 2006.
The transaction is expected to have a positive impact on the earnings per share of Sembcorp Industries for the current financial year. Assuming that the transaction had been completed on June 30, 2013, the earnings per share of the Group for the first six months of FY2013 (1H2013) would have increased from 19.16 cents per share to 25.71 cents per share. However, the transaction is not expected to have a material impact on the company’s net asset value per share for the current financial year.
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ABOUT SEMBCORP INDUSTRIES
Sembcorp Industries is a leading energy, water and marine group operating across six continents worldwide. With facilities of over 5,900 megawatts of gross power capacity and over seven million cubic metres of water per day in operation and under development, Sembcorp is a trusted provider of essential energy and water solutions to both industrial and municipal customers. It is also a world leader in marine and offshore engineering as well as an established brand name in urban development.
The Group has total assets of more than S$13 billion and employs over 9,000 employees. Listed on the main board of the Singapore Exchange, it is a component stock of the Straits Times Index and several MSCI and FTSE indices.
Note to Editors:
Please refer to the company as “Sembcorp” (with “S” in upper case and “c” in lower case), or “Sembcorp Industries” in full. Please also note that “Sembcorp” is not an abbreviation of “Sembawang Corporation” but a brand name in itself, and it is therefore incorrect to refer to our company as “Sembawang”, “Sembawang Corporation” or similar.