Sembcorp Industries said in a filing to the exchange on Wednesday (April 2) that it proposed to acquire Senoko Energy, a move that could more than double its stake in Senoko Energy.

Its wholly-owned subsidiary, Sembcorp Utilities, has signed a sale and purchase agreement to increase its stake in Senoko to up to 70%, more than double its current 30% share as reflected in its annual report.

The agreement was signed by Korea Electric Power Investment Netherlands, KEPCO International and Japan Bank for International Cooperation (JBIC) to acquire up to 57.1% of the shares of the joint venture Lion Power, which holds 70% of Senoko's interests.

Lion Power is owned by a joint venture composed of Marubeni Corporation, Korea Electric Power Investment Group Netherlands Branch, KEPCO International and Japan Bank for International Cooperation. Marubeni Corporation holds the remaining 42.9% equity of Lion Power.

The proposed acquisition of up to 70% equity of Senoko is subject to Marubeni Corporation's pre-emptive right.

The maximum consideration for the acquisition is S$144 million, including an acquisition price of S$137 million and a working capital adjustment of S$7 million. It will be funded through Sembcorp's internal cash resources and/or external borrowings and is planned to be completed in Q2 2025.

Sembcorp said the Energy Market Authority has reviewed the proposed acquisition and has no objections. The company added that the review took into account commitments made by Sembcorp to ensure fair market competition, including providing sufficient retail contracts to ensure that consumers have competitive retail options.

After the proposed acquisition is completed, it is expected to increase Sembcorp's profitability but will not have a material impact on the group's net tangible assets per share for the financial year ending December 31.

Before the news release, the stock closed up 1.3% at S$6.42 on Tuesday, up S$0.08.