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Singaporean utilities firm Sembcorp Industries has agreed to sell its Sembcorp Energy India Limited unit to Tanweer Infrastructure Pte for 117.34 billion rupees ($1.47 billion), it said on Monday.
The deal is part of Sembcorp Industries' strategy to shift to green energy generation, the company said in a filing to the Singapore Stock Exchange.
Sembcorp Energy, one of the largest power producers in India, operates two coal-fired power plants totalling 2.64 gigawatts, servicing nearly 2.5 million households.
Sembcorp said the sale, priced at book value via its wholly owned subsidiary Sembcorp Utilities Pte Ltd, would result in Tanweer Infrastructure - part of a consortium led by Oman Investment Corporation and an Omani pension fund - becoming Sembcorp Energy's sole shareholder.
Speaking at a media briefing on Monday, Sembcorp's Chief Financial Officer Eugene Cheng said there is a lack of liquidity for financing coal-related assets in the current market.
Tanweer Infrastructure will finance the purchase via a deferred payment note provided by SCU, the company said.
Sembcorp's executives said at the briefing that the sale would not mean the company's exit in India, and that it would invest more in the market and elsewhere.
Indian local newspaper Mint reported in August that Sembcorp was bidding for Indian clean energy platform Vector Green Energy.
Sembcorp's President and Chief Executive Wong Kim Yin declined to comment on the Vector acquisition, but said the group was "constantly on the lookout for new assets".
The Sembcorp Energy India sale is subject to Sembcorp shareholders' approval in November and is expected to be completed six months later if regulatory clearance is obtained.
HSBC's Singapore branch is the sole advisor to the sale, Sembcorp said.
(Reporting by Savyata Mishra in Bengaluru and Kane Wu in Hong Kong; Editing by Dhanya Ann Thoppil and Jan Harvey)