Sembcorp Industries, through its subsidiary Sembcorp Solar Vietnam Pte Ltd, has finalized an agreement to acquire majority stakes ranging from 73% to 100% in several subsidiaries of Gelex Group Joint Stock Company. This acquisition, subject to regulatory approvals, marks a significant step for Sembcorp’s expansion in the renewable energy sector.
The transaction will bring in 245MW of operational renewable assets, including wind, solar, and hydropower, amplifying Sembcorp’s existing portfolio in Vietnam to over 450MW. Upon completion, the group’s gross renewable capacity will escalate to 12.2GW, solidifying its position in the country’s renewable energy landscape.
Crucially, the assets being acquired boast long-term power purchase agreements with Vietnam Electricity, a state-owned enterprise, ensuring stability and predictability in power generation.
Beyond this acquisition, Sembcorp and Gelex are committed to further exploration of opportunities in Vietnam’s renewable energy domain, leveraging the success of this transaction.
The financial aspect of the deal involves a maximum equity consideration of approximately S$218 million, expected to be funded through a blend of internal cash resources and external borrowings. The completion of this transaction is slated for the first half of 2024, pending regulatory clearances.
While this transaction represents a significant stride for Sembcorp, the company has clarified that it will not yield any material impact on the earnings per share and net tangible asset per share for the financial year ending December 31, 2023.
This move aligns with Sembcorp’s strategic vision of expanding its foothold in renewable energy and underscores its commitment to sustainable development in Vietnam’s energy landscape