Facing a plunge in their quarterly profit, Singapore-based Sembcorp Industries has changed its strategy and plans to raise about SGD500 million from the sale of some utilities assets. Further, the company also plans to list its Indian energy business.
“The company has initiated the process for an initial public offering of Sembcorp Energy India Limited on BSE Limited and the National Stock Exchange of India, with the filing of a draft red herring prospectus,” stated a release issued by Sembcorp today.
The company expects that divestments will provide cash proceeds of up to SGD500 million, not including the potential proceeds from the proposed India IPO.
Sembcorp Industries, the biggest shareholder in rig-builder Sembcorp Marine, reported a net profit of SGD22.8 million for the fourth quarter, a drop of 85 per cent from the same period a year ago.
Sembcorp Marine turned in poorer-than-expected results earlier this week, sending its stock down 11 per cent on Thursday. Still, its shares have risen more than 26 per cent this year.
However, the company sounded optimistic and revealing its future strategy said, “Sembcorp will reposition its portfolio across certain developing and developed markets. Backed by the strong track record and scale it has established in the region, the business will now focus and deepen its presence in four key markets, namely Singapore and Southeast Asia, China, India and the UK.
Neil McGregor, Sembcorp Industries' CEO, said “The company was confident that Sembcorp Marine was well-positioned to benefit from offshore and marine industry's recovery. We will continue to support the business through the cycle.”
Sembcorp industries, which set a target of doubling its renewables portfolio to about 4,000 megawatts by 2022, also said it had entered into a conditional agreement to divest its municipal water operations in South Africa.
Axis Capital, Credit Suisse, CLSA and SBI Capital Markets are the global coordinators for the India IPO. The four firms and IndusInd Bank are the book running lead managers for the issue.