EMEA: SAUR bidders wait for shortlist

08 June 2018 - 12:00 am UTC

At least seven infrastructure funds have submitted bids for a 70% stake in French water concessions company SAUR, people claiming familiarity with the situation said.

They include Antin Infrastructure PartnersEQT PartnersIFM Investors, I Squared, KKR Infrastructure, JP Morgan Asset Management and Meridiam.

Meridiam bid in consortium with Canadian pension fund CDPQ, one source added.

The bidders are expected to be shortlisted imminently, ahead of a second round. 

Following a 2013 restructuring, BNP ParibasNatixis and RBS jointly hold almost 50% of SAUR’s equity. The remainder is held by the group’s other lenders including Dexia, ING and SocGen, as well as hedge funds.

The higher cost of capital of the funds which decided to bid reflects the fact that SAUR relies on medium term water management concessions and does not have a strong asset base. It regularly has to bid with local authorities to renew the concessions, against larger competitors like Veolia and Suez Environnement. It also has lower margins than other assets in the infrastructure space and cannot support such high levels of debt, sources said.

There is a staple financing lined up ahead of the sale, one source added, but buyers have also approached banks to refinance debt agreed in the 2013 restructuring, and further reduce the level of leverage.

The 2013 deal cut senior debt from EUR 1.44bn to EUR 900m and added EUR 500m of high-yield payment in kind (PIK) debt.

SAUR, Antin, CDPQ, EQT, IFM, JP Morgan and KKR declined to comment. I Squared and Meridiam did not respond to requests for comment.