Singapore, August 17, 2000 – SembCorp Industries’ wholly-owned waste management unit SembCorp Waste Management (SembWM) has succeeded in the tender for the acquisition of SEMAC – the largest waste management company in Singapore – at a bid price of $120 million.

SembWM has signed a conditional sale and purchase agreement with ENV Corporation, a wholly-owned subsidiary of Temasek Holdings, for the acquisition of total equity in SEMAC.

SembWM’s 60 per cent-owned joint venture company with French partner SITA, SembCorp SITA, will then assume the ownership of SEMAC by end-2000.

About SEMAC

SEMAC is Singapore’s largest and leading full-service waste management company serving over 700,000 homes and more than 41,000 shops, offices, commercial buildings and industrial estates across the island. Its core activities are refuse collection and bulk waste removal.

SEMAC has built up a track record of 25 operating years and attained a market share of about 47 per cent of Singapore’s waste management industry.

SEMAC operates the largest fleet of refuse collection vehicles and mobile compactors in Singapore. Out of the seven depots in the country, SEMAC owns five located at Senoko, Sin Ming, Bedok, Bukit Merah and Clementi. Other assets include 176 refuse collection vehicles, 447 compactors and 96 prime movers.

In its last financial year ended March 31, 2000, SEMAC posted revenues of $145.6 million and net profits after tax of $13.6 million.

Rationale for the acquisition

The acquisition of SEMAC provides a quick boost to SembWM’s waste collection capabilities, including its asset base, systems and processes, waste collection and disposal routings and scheduling network.

SEMAC would immediately raise SembCorp SITA’s share of the domestic, industrial and commercial waste collection markets. Backed by a workforce of extensive experience of an average 25 years in the area of waste collection, SEMAC would augment SembCorp SITA’s credentials and enable it to bid competitively for the remaining seven municipal collection zones that are progressively being put up for privatisation by end-2000.

SEMAC supplies a significant portion of feedstock for incineration plants in Singapore which are targeted for privatisation by the Ministry of Environment. It will form part of SembCorp SITA’s vertically integrated value chain for waste management in the event that the latter wins the bids for the incineration plants. SembCorp SITA could then offer more competitive services in the municipal, industrial, commercial and specialised sectors such as medical waste disposal.

Financial impact on SembCorp Industries

For illustrative purposes only, based on the audited financial statements of SembCorp Industries ended December 31, 1999 and assuming that the transaction had taken place in January 1, 1999, the net gearing ratio would have increased from 0.49 times to 0.56 times. The transaction will have a positive impact on SembCorp Industries’ earnings per share and net tangible asset per share over the long term although there will be no significant immediate impact.

Chapter 9A of Listing Manual

Temasek Holdings, directly and indirectly through Singapore Technologies Pte Ltd, holds 57.75 per cent of SembCorp Industries. The acquisition is therefore an interested person transaction under Chapter 9A of the Listing Manual of the Singapore Exchange.

Under the sale and purchase agreement, the acquisition is subject to the approval of the shareholders of SembCorp Industries.

Except where disclosed, none of the Directors or substantial shareholders of SembCorp Industries has any interest, direct or indirect, in the acquisition.

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For enquiries, please contact:

Chow Hung Hoeng (Ms)
Senior Executive, Group Corporate Relations
Tel: (65) 3579 152
Fax: (65) 3522 163
Email: [email protected]