Siemens (Pakistan) Engineering Co. Ltd (SIEM) has declared the approval of the Board of Directors(BoD) for the sale of its energy portfolio to Siemens Gamesa Renewable Energy (Private) Limited for approximately Rs. 17.82 billion (~ $ 64 million). This decision was also confirmed in a notice to Pakistan Stock Exchange (PSX) on October 14th, 2024.
The board’s approval came during a meeting that was held on October 11th, 2024, which is a continuous transition process of the change in the energy business of SIEM.
The transaction will include the divestment of the energy business segment on a going concern basis to Siemens Gamesa, an associate of the Siemens Energy Group. The valuation date for this transaction was March 31st, 2024, with the net book value of the energy business being roughly Rs 17.61 billion (~ $ 63.5 million).
This move has come after the Board approved an in-principle decision on March 10th, 2023, to facilitate this sale. An independent fairness opinion from a global audit and consulting firm was obtained to justify the board’s decision as it meets the market standard.
“The determination of cash to be received from the buyer and gain/loss on the transaction is subject to computation based on net book value as of the effective date (i.e. transaction closure date) and certain other contractual subsequent events by the terms and conditions of the agreement to be executed with the buyer,” SIEM said.
The completion of this transaction is subject to receipt of required shareholder and regulatory approvals. It was incorporated in the year 1953 as a public limited company and is involved in manufacturing, and selling electronic and electrical capital goods along with executing projects in power and gas, energy management, and digital factory solutions.
This strategic divestment also falls in line with the company’s long-term strategy of refocusing the organization, with a far greater emphasis being placed on renewable power.
