Renewi announced today (3 September) that it has completed a “strategic exit” from the UK organics sector with the sale of its 50% share in the Energen Cumbernauld anaerobic digestion facility in Scotland.
The waste management company, formerly known as Shanks, said that it had sold its share in the plant, which it opened in 2011, to investment business Bio Capital Limited which is owned by Helios, Equitix and Aurium Capital. The other 50% of the business is owned by Energen Biogas.
Renewi noted that the sale of the “non-core asset is fully aligned with Renewi’s stated strategy to actively manage its business portfolio. The transaction successfully completes Renewi’s planned exit from the UK AD sector, following the sale of its Westcott Park AD facility to Olleco earlier this year.”
As a consequence of leaving the organics sector, the company said that it will allow its municipal division to “focus its effort and resources, while also generating cash and a profit on sale.”
A £5 million expansion in April 2015 at the time made the plant the largest AD facility in Scotland– capable of treating up to 100,000 tonnes of food waste each year (see letsrecycle.com story).
James Priestley, managing director of Renewi’s Municipal Division said: “I am pleased that we have completed our planned exit from the UK organics sector with the sale of our non-core Energen biogas facility. The sale of EBG is fully aligned with our strategy, generates cash and profit, and allows us to focus on delivering profit growth within the municipal division.”
The AD plant contributed £1.6m to Renewi Group profit before tax in the year ended 31 March 2018. The sale was completed for an undisclosed cash consideration “which will result in £10m profit on sale (proceeds above book value)”, said the company and this is to be reported as an exceptional item in the current financial year.
Bio Capital Limited has recently been established to own and operate a number of AD plants within the UK and Ireland. It said that the acquisition of EBG represents a cornerstone investment within this portfolio.
Renewi, which also has operations on the European continent and in Canada, continues to operate in the organics sector in Canada.
Earlier this summer it noted that it had been processing waste using tunnel composting technology for the City of Ottawa since 2010. Under a new contract, Renewi said that it will accept additional materials “including household organic waste in plastic bags and organic pet waste”.
It added that the new service is expected to be implemented in mid-2019 and “signals the end of a long-running litigation process between the City of Ottawa and Renewi”.