SEMBCORP ESTABLISHES FIRST POWER PROJECT IN INDIA

Sembcorp acquiring 49% stake in Thermal Powertech Corp India for S$319m


SINGAPORE: Sembcorp Industries is taking a bite into India's growing energy market with a major stake in a power company there.


The local conglomerate said that its fully-owned subsidiary Sembcorp Utilities is acquiring a 49 per cent stake in Thermal Powertech Corporation India (TPCIL) for S$319 million.

A joint venture agreement has been signed between Sembcorp Utilities and Gayatri Energy Ventures (GEVL), which will hold 51 per cent stake in TPCIL, the firm said.

TPCIL is set to build, own and operate a coastal power plant in Krishnapatnam, SPSR Nellore District, Andhra Pradesh, India.

It will invest S$2.1 billion on a 1,320 megawatt coal-fired power plant in Krishnapatnam, which will serve the energy demand in the southern, western and northern regions of India

The plant will be operated by an O&M company, of which 70 per cent will be owned by Sembcorp while 30 per cent will be held by GEVL.

The full commercial operation of its two 660-megawatt units is expected to begin by end-2013.

The acquisition will be funded through internal funds and borrowings, Sembcorp said.

It is expected to be completed in mid-2010 once conditions for the implementation of power projects in India are satisfied.

The transaction is not expected to have a material impact on the earnings per share and net tangible assets per share of Sembcorp Industries in the current financial year. - CNA/vm