The transaction will be completed by the end of the year.
Sembcorp Industries, through its wholly-owned subsidiary CSE Holding, has signed a conditional agreement to divest its entire 32% stake in the joint venture company Shenzhen Chiwan Sembawang Engineering (CSE) to Chixiao Enterprise for $29.4m (RMB150m), according to a bourse filing.
The consideration, net of relevant taxes, will be received in cash upon completion of the sale. Upon completion, CSE will cease to be a part of the group.
The transaction is expected to be completed by the end of the year, subject to the satisfaction of certain conditions precedent, including the regulatory approval of the local Administration for Market Regulation.
The divestment of this non-core asset is in line with the group’s capital recycling efforts, the bourse filing stated.
CSE is in the business of fabrication and sale of offshore engineering, onshore industrial and structural engineering steel structure products. It operates under a 30-year business licence which expires in July 2024.
Sembcorp’s carrying value of this investment was $27m as of June 30. A $30m impairment charge on the investment was taken in the group’s financial results for the half year ended June 30.
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