UK's Renewi to sell UK Municipal business to Biffa (updated)
30/05/2024 07:43
(Adds Renewi CEO comment in paragraph 3, details of transaction
in paragraph 4, analysts' comment in paragraph 5)
May 30 (Reuters) - Waste management firm Renewi RWI.L
plans to sell its UK Municipal business to Biffa Ltd as it fully
shifts focus to European recycling markets in line with last
year's strategic review, the London-listed company said on
Thursday.
Renewi said it will make the transaction through a
combination of a nominal cash consideration payable to Biffa and
an expected 125-million-pound ($158.6 million) capitalisation of
UK Municipal to help the divested business fulfil its future
contractual obligations.
"Biffa's financial position, operational expertise, and
presence in the UK municipal landscape make them the right new
home for our UK Municipal business," Renewi CEO Otto de Bont
said in a statement.
Renewi said the expected capitalisation, when offset
against the reduction of liabilities of 89 million euros ($96.1
million), equates to a net cost of about 57 million euros to
Renewi, and a total cash impact of 154 million euros, including
transaction costs.
Peel Hunt analysts said in a note that Renewi has
effectively delivered the planned exit from UK Municipal at no
greater a cost than already provided, ex-transaction costs and
is now a much simpler entity that should appeal more widely.
($1 = 0.7881 pounds)
($1 = 0.9264 euros)
(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by
Janane Venkatraman and Sohini Goswami
)
((abyjose.koilparambil@thomsonreuters.com))