Cory Riverside Energy owners considering £1bn London incinerator sale – reports
The owners of Cory Riverside Energy are reportedly considering putting its East London Belvedere energy-from waste facility up for sale for more than £1 billion, a decision that some outlets have suggested could start a bidding war among Chinese suitors.
The Sunday Times reported on Sunday (15 October) that the firm was looking to sell the facility, which provides the focal point of its operations treating residual waste in the capital.The East London incinerator came online in 2011, and in 2016 processed 753,000 tonnes of waste – primarily from the Western Riverside Waste Authority, comprising Hammersmith & Fulham, Kensington & Chelsea, Wandsworth and Lambeth councils – generating 528 gigawatt hours of electricity.
That year, the firm reported record turnover of £103.5 million, up three per cent on 2015, with operating profits of £42.1 million. In April, Cory announced a £520m debt-refinancing package as part of a restructuring of the company to focus exclusively on energy-from-waste. The existing senior term debt for the Belvedere incinerator was refinanced with both a £420.5 million multi-tranche senior facility and a £98 million junior facility for the plant.
At the time, CEO Nicholas Pollard said that the refinancing provided “an exciting opportunity for us to focus on future growth”, adding that the facility “offers a highly visible earnings stream, which is driven by long-term municipal contracts and indexed gate fees”.
In addition, Cory Riverside Energy last month announced that it had been awarded a ten-year contract to provide waste management services for the London Borough of Tower Hamlets. The contract, which runs from this month to March 2027, with an option to extend the deal until 2035, will see Cory process up to 110,000 tonnes of waste from the borough every year at the Belvedere facility.
However, the Sunday Times suggests that Cory Riverside Energy is being sold by the Strategic Value Partners (SVP) fund, the manager of investment funds that own the majority of the company, alongside other investors including investment firm EQT Services (UK) Limited and German banking company Commerzbank.
The report suggests that SVP has hired JP Morgan to take a lead in assessing the company's options.
In the last few years the Cory has sold a number of the group’s businesses, selling its collections arm, Cory Environmental Municipal Services Limited, to Biffa for £13.5 million in June 2016, and its group of national waste brokerage businesses to waste management services company Reconomy a few months later.
Last month, reports emerged that the Cory Riverside Energy Group was the subject of interest from CK Infrastructure Holdings Ltd, a Hong Kong-based investment company that already owns stakes in a number of British utilities companies including Northern Gas Networks Limited, UK Power Networks and Wales & West Utilities.
Sources told Bloomberg that the energy-from-waste company ‘could be valued at more than £1 billion, including debt’, with China Everbright Group and Beijing Enterprises Group also reportedly weighing up offers for the company.
Cory Riverside Energy declined to comment on the sale rumours, however, Resource understands that any sale would have no impact on any of the firm’s municipal contracts with Tower Hamlets or the Western Riverside Waste Authority.