Waste management company Renewi announced plans to sell its UK Municipal business to Biffa Ltd, aligning with its strategic shift towards European recycling markets.
This move follows last year's strategic review, as disclosed by the London-listed firm on Thursday.
Renewi will conduct the transaction through a nominal cash consideration payable to Biffa, along with an anticipated £125 million ($158.6 million) capitalization of the UK Municipal business. This capitalization is intended to help the divested business meet its future contractual obligations.
"Given Biffa's strong financial position, operational expertise, and established presence in the UK municipal sector, they are the ideal new owner for our UK Municipal business," stated Renewi CEO Otto de Bont.
The expected capitalization, when set against the reduction of liabilities amounting to €89 million ($96.1 million), results in a net cost of approximately €57 million to Renewi. Including transaction costs, the total cash impact on Renewi is €154 million.
Analysts at Peel Hunt noted that Renewi has successfully executed its planned exit from the UK Municipal market without exceeding the previously anticipated costs, excluding transaction expenses. This transition positions Renewi as a more streamlined entity, potentially increasing its appeal to investors. Photo by Donald Trung Quoc Don (Chữ Hán: 徵國單) - Wikimedia Commons - © CC BY-SA 4.0 International.