NCC close to selling its thermal power assets to Sembcorp...

 

Infrastructure firm NCC has signed a detailed term sheet to sell its thermal power assets to Singapore global utilities services firm Sembcorp, moving a step closer to a definitive agreement, said two people aware of the development.

The development comes days after France's power GDF Suez agreed to buy a 74% stake in Meenakshi Energy, possibly indicating revival of interest among global investors in Indian infrastructure.

The sources said NCC and Sembcorp agreed on a broad framework to determine premiums to be paid on attainment of milestones.

They expect a definitive agreement and a final deal over the next six to eight weeks. NCC is developing a 1,320MW coal-fired power project at Krishnapatnam in Nellore district of Andhra Pradesh in a joint venture with Gayatri Projects, another Hyderabad-based infrastructure firm. NCC holds 55% stake in the project.

Sembcorp proposes to pay around 500 crore to buy the stake from NCC and invest more in phases. The premium payments will be made over the next few years based on milestones like project completion, fuel linkages and power purchase agreements. NCC will continue as the EPC (engineering, procurement and construction) contractor.

Confirming a detailed term sheet with Sembcorp, KV Rao, CEO of NCC Infrastructure Holdings, the holding company of NCC for BOT road and power assets, told ET that he expects a definitive agreement with Sembcorp by January next year. Sembcorp did not respond to an E&Y mail seeking details on the agreement with NCC.

PwC's energy, utilities and mining leader Kameswara Rao said the structuring of the deals is "understandable and bridges the gap between long-term expectations and the more immediate concerns of project delivery risks".

If it fructifies, the deal will make it the third major investment in India for Sembcorp, which had reported revenues of S$10.2 billion ( 48,000 crore) in fiscal 2012, and its second in India's power sector. Sembcorp bought a 49% stake in a 1,320MW power project being developed by Thermal Powertech of Gayatri Projects for 1,042 crore in 2010. Earlier in November 2009, it had bought 40% stake in a marine offshore venture of Kakinada Seaports.

The deal also helps Sembcorp increase its Indian power portfolio to 2,640MW, at Krishnapatnam in Andhra Pradesh, making it the third largest global investor in the Indian energy sector after Hong Kong's CLP Holdings and United States-based AES Corporation.

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Ramky Acquires Sembcorp's Stake In Indian JV...

 

Sembcorp Environment, subsidiary of Sembcorp Industries, is divesting its entire stake of 51% in Sembcorp Enviro (India) to partner Ramky International (Singapore) for $7.25 Mn, Straitstimes states. The move is line to streamline its businesses and sharpen its strategy for the Indian market.

Sembcorp Enviro (India) is a special purpose vehicle that owns a 51 per cent stake in SembRamky Environmental Management, a medical waste collection and treatment player in India.

The Singapore major SembCorp Industries had acquired a 51% stake in Medicare Incin Pvt Ltd, a wholly-owned subsidiary of the Ramky Group, Hyderabad, to enter the medical waste disposal business in India.

The JV company was called SembEnviroRamky, which suited Sembcorp’s expansion strategy in India as well as helping in internationalising its business at that time.

Ramky Enviro Engineers Ltd acquired the commercial cleaning, conservancy services, and car park management units from Sembcorp Environment Pte. Ltd in Singapore through its fully-owned subsidiary Ramky Cleantech Services Pte Ltd., in 2009.

Ramky is headquartered in Hyderabad with regional offices located at Delhi, Mumbai, Ahmedabad, Bangalore, Chennai, Bhopal and Kolkatta and over 50 project offices. It provides services in the areas of civil, environmental and waste management infrastructure.

Sembcorp is a provider of essential energy and water solutions to customers in Singapore, China, Vietnam, the United Kingdom, the UAE and Oman. The Group has total assets of over S$13 billion and employs over 9,000 employees.

Sembcorp Environment also has stakes in Singapore based SembWaste (100%), Sembcorp Tay Paper Recycling (60%) and Australia based SembSITA Australia (40%).

Recently , A unit of Sembcorp Industries, backed by investor Temasek, was planning to acquire a majority stake in NCC Power Project for R1500 Cr; In November 2009, Sembcorp through its wholly owned subsidiary Sembawang Shipyard had formed a JV with Kakinada Seaports Ltd to establish and operate a marine and offshore facility.; In 2006, the firm had sold Sembawang Engineers and Constructors Pte Ltd to Punj Lloyd Pte Ltd, an arm of Indian infrastructure firm Punj Lloyd in two tranches for a total of $25.33 million.

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