EMEA: CKI frontrunner for Cory Riverside

30 May 2018 - 12:00 am UTC

A number of bidders for London-based energy from waste business Cory Riverside have dropped out of the process, as the sale nears its conclusion.

Final bids for the company, which includes a 66MW EfW plant, several waste transfer stations, and a bottom ash processing facility are due to be submitted next week.

But at this late stage in the process, there are few potential buyers for the business remaining – with Hong Kong-listed Cheung Kong Holdings believed to be among the frontrunners. Bids are believed to be valued at north of GBP 1bn, while the sellers are seeking circa GBP 1.5bn.

Dalmore Capital, advised by Rothschild, is likely to submit a bid despite uncertainty around its remaining consortium partners.

The asset manager originally teamed up with the Amber Infrastructure-managed International Public Partnerships (INPP), which sources said dropped out in the first round of bidding.

DIF, which has eight active funds with a focus on PPPs and renewables, is also believed to have left the race having previously replaced INPP in the Dalmore consortium.

DIF is not known to invest in energy from waste, and a source familiar said that Cory Riverside did not fit its risk profile.

An Equitix and QIC Global Infrastructure consortium is meanwhile also still likely to submit a final bid.

Elsewhere, transmission and distribution network owner Singapore Power is meanwhile believed to be still in the process, according to one source familiar with the transaction.

London Stock Exchange-listed Pennon Group, which was being advised by Morgan Stanley, is believed to have left the process.

Pennon entered a surprise indicative bid for Cory Riverside last month and at the time was thought to be well suited to buy the company.

Its subsidiary, Viridor, has a history of operating EfW plants and is currently developing an incinerator to process household waste from across south London.

The utility joins a number of infrastructure fund managers including Allianz, Arcus, and OMERS to have pulled out of what is likely to be the largest waste deal of the year.

The 66MW Belvedere plant processes 750,000 tons of household and commercial waste from London each year and there are plans to expand the site. This will include more incineration capacity, an anaerobic digestion plant, solar PV panels, battery storage and a data centre.

Bidders are also exploring refinancing options for the business in anticipation of the sale close, which could involve going back to commercial banks or issuing a bond.

Cory Riverside’s sponsors – Strategic Value Partners, Commerzbank, and EQT Credit – last refinanced the business in 2017 with GBP 520m of loans from a bank club, Hastings Fund Management, JP Morgan and the Sequoia Economic Infrastructure Income Fund.

 

Cory Riverside