Singapore's Sembcorp inks $6.5b deal to buy Alinta Energy
Make us a preferred source
Make us a preferred source on Google
The news: Singapore stock exchange-listed Sembcorp has agreed terms to acquire Alinta Energy in a deal that values the company at $6.5 billion.
The numbers: A press release shared by the companies on Thursday said that the purchase consideration of $6.5 billion will be paid in cash, funded by a fully committed $6.5 billion bridge facility and that equity fund-raising will not be required.
The context: The deal brings a multi-year effort by Chow Tai Fook Enterprises to sell Alinta, Australia’s fourth-largest utility company, to a close.
Alinta’s largest asset is the brown coal-fired power station Loy Yang B which has a maximum generating capacity of 1200 megawatts and supplies about one fifth of Victoria's power.
Sembcorp said that the proposed acquisition advances Sembcorp’s strategic plan to grow its renewables portfolio and delivers immediate earnings accretion. Alinta owns and operates a fleet of highly reliable and well-maintained generation assets, with best-in class generation and energy risk management.
It added that Australia is a key market for Sembcorp’s ambition to grow its renewables capacity to 25GW by 2028, building on over $5.9 billion the company has invested in renewable energy projects globally.
Sembcorp was advised by DBS Bank and Goldman Sachs.
What they said: Dr Henry Cheng, Chow Tai Fook Group chairman, said: “Our eight-year investment in Alinta has played an important role in providing reliable and affordable energy to Australians."
Alex Tan, president and CEO, Renewables, East, Sembcorp, said: “By combining Sembcorp’s global renewables expertise and access to capital with Alinta’s strong local workforce and project pipeline, we believe we can contribute meaningfully to Australia’s decarbonisation goals and support long-term employment opportunities in local communities.”
