Cory Riverside Energy refinances giant London incinerator

UK waste management company, Cory Riverside Energy, has announced the completion of a £520 million debt-refinancing package for its massive Riverside incineration plant in Belvedere, East London. The announcement follows the restructuring of company to focus exclusively on incineration.

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.

Initially proposed in the early 1990s and approved in 2006 by the then Department of Trade and Industry, the plant was opposed by the local council and many local residents, who formed the Bexley and District Against Incineration Risks (BADAIR) group. It was also the subject of three public inquiries, as well as a legal bid by then London Mayor Ken Livingstone to prevent its construction.

It came online in 2011, however, and was officially opened in May 2012. In 2016, the facility, one of the largest in the UK, incinerated 753,000 tonnes of waste – primarily from the Western Riverside Waste Authority, comprising Hammersmith & Fulham, Kensington & Chelsea, Wandsworth and Lambeth councils – and generated 528 gigawatt hours of electricity.

The refinancing package has a hybrid structure involving both infrastructure-focused banks and institutional lenders and has been split into a £322.5 million 7-year amortising senior term loan, a £98 million 13-year amortising senior institutional facility, a £98 million 7.5-year junior facility, and a yielding structure which removes the cash sweep from the original debt package.

Commenting on the package, Nicholas Pollard, CEO of Cory Riverside Energy, said: “This refinancing and the make-up of our new lenders demonstrates great confidence in Cory Riverside Energy and our place at the heart of London’s resource management infrastructure. It marks the culmination of the plan agreed with our shareholders 15 months ago, and completes the restructuring of the business. Our financial structure now reflects the operational structure, with a simplified business and removal of historic risk.

“Our Riverside facility and infrastructure is unique in the sector, with an exemplary operational track record. It has been reliably operating at capacity since day one, and has the benefit of long-term contracts and indexed gate fees. We’ve had another record year, with 12 months of operating at a new, higher capacity. This refinancing is an exciting opportunity for us to focus on future growth and to develop the business even further.”

Stripping back

The debt-refinancing package for the Riverside plant forms part of the new strategy of Cory Riverside Energy, formerly Cory Environmental Group, to simplify the group’s structure and focus on its incineration operations.

In June 2016, the Cory Group sold its waste collection arm, Cory Environmental Municipal Services Limited (CEMS), to Biffa in a deal worth £13.5 million, after a strategic review by the group’s board decided that waste collection was no longer one of the group’s core aims.

A month later in July 2016 the Cory Group sold its national waste brokerage businesses to waste management services company Reconomy in a further move to simplify its waste collection services.

The group of businesses included UK Nationwide Skip Hire Limited (trading as Skippy Nationwide), Skips @ Home Limited (Skip Hire UK) and Cory Environmental Recycling Services Limited.

In January 2017, the Cory Group finalised the sale of its 14 landfill sites and associated landfill gas operations across the UK to the Armour Group Holdings Ltd and rebranded itself as Cory Riverside Energy.