SBI Offshore spends $10m to acquire solar power assets

Singapore-listed SBI Offshore announced in July that it has formed a partnership with Grass Group, establishing a joint venture named Graess Energy in Singapore to construct, own and operate solar photovoltaic (PV) energy systems and plants (PV projects).

SBI Offshore owns 51% of the joint venture while the remaining 49% is held by special-purpose firm GSS Renewables under Grass Group.

The latest asset acquisition by SBI Offshore involved the purchase of four PV power plants and systems in Europe and two operating companies for SGD13.97m in a cash and shares transaction.

The assets will then be injected into the joint venture Graess Energy. SBI Offshore will pay Grass Group SGD2.3m in cash and issue 44m new shares at SGD0.265 each which is worth SGD11.7m. The issue price represents a 15.72% premium over the average price for the trades done on SBI Offshore shares on 30 July of SGD0.229.

The assets include four solar PV power plants at various locations in Bulgaria, which collectively has an installed capacity of 16.3 megawatts. SBI Offshore will also acquire 51% stake in Grass Engineering and Grass Operation Maintenance, which are wholly-owned by Grass Group.

“This acquisition will provide us the track record and capabilities to accelerate SBI Offshore’s foray into solar energy, and enable Graess Energy to tap strategic growth opportunities in Asia,” said Chan Lai Thong, executive chairman of SBI Offshore.

Graess Energy will tap on growth opportunities in the Asia-Pacific region, the world’s fastest growing market for PV projects due to its increasing energy demand and greater focus on renewable energy.

Chan said earlier that Graess Energy will most likely make a first move into Japan which presents better prospects such as higher feed-in tariffs, as well as to look at other markets in Kazakhstan, Thailand, the Philippines, Malaysia and the Middle East.

The downturn in the offshore marine market, due mainly to the fall in global oil prices, has triggered SBI Offshore to venture into the new solar power business. The company had earlier entered into talks with a Middle East-Chinese consortium for the construction of up to five jack-up drilling rigs back in August 2014. So far, there were no further developments on the talks.