LONDON (Reuters) – Indicative bids for Essent Milieu, the waste management unit of Dutch utility Essent, are due next Wednesday, a source familiar with the matter said.
Earlier this year banking sources said Essent, which is selling its much bigger power production and delivery businesses to Germany’s RWE (RWEG.DE), hoped to fetch more than 1 billion euros ($1.26 billion) for the unit.
But the sale will test how much appetite remains for the unglamorous but dependable business of garbage treatment, which enjoyed a mini-boom during the credit bubble.
The auction had originally been expected to get underway in January. However, bankers close to the deal said last month the process slowed because trade buyers and private equity houses found it tough to raise funds for new acquisitions.
Dutch bank ING, which is running the sale alongside Credit Suisse, is still working to agree a staple financing package of about 400 million to 500 million euros ($506 million to $632 million) with other banks, the source familiar with the matter said on Friday.
Private equity firms and infrastructure funds are already big sector players: CVC [CVC.UL] and Kohlberg Kravis Roberts [KKR.UL] have jointly bought two Dutch companies already, while Montagu Private Equity and Global Infrastructure Partners (GIP) own Britain’s Biffa.
But one key trade rival, France’s Veolia Environnement SA (VIE.PA), said on Friday it was not interested in bidding.
Essent Milieu, also known as Essent Waste, processes about 3 million tonnes of waste a year, burning some for electricity, composting other waste and managing landfills.
On Thursday, Essent said the sale process for Essent Milieu officially started in early February and was expected to go ahead this year.
An Essent representative was not immediately available for comment. (Reporting by Quentin Webb; Editing by Andre Grenon)