CKI-led group in €940m Dutch waste deal

A consortium led by Hong Kong’s Cheung Kong Infrastructure has agreed to acquire AVR Afvalverwerking, the Netherlands’ largest energy-from-waste company.

A grouping of Hong Kong investors has swooped for AVR Afvalverwerking (AVR), the largest energy-from-waste (EFW) firm in the Netherlands with a 23 percent market share of the country’s waste processing industry.

The consortium led by publicly listed infrastructure investor Cheung Kong Infrastructure (CKI) has agreed to pay HK$9.7 billion (€940 million; $1.3 billion) for the business. The seller is Van Gansewinkel Groep, the Eindhoven-based waste collection, recycling and energy-from-waste business.

CKI is taking a 35 percent stake in AVR, with parent group Cheung Kong (Holdings) also buying 35 percent. Power Assets Holdings – which, like CKI, is also a part of Cheung Kong (Holdings) – is acquiring 20 percent; and the Li Ka Shing Foundation Limited is taking 10 percent.

The Li Ka Shing Foundation is a charitable organisation established by Hong Kong billionaire Li Ka Shing, the chairman of Cheung Kong (Holdings).

A press release from CKI described AVR’s revenue streams as “very stable”. The firm has long-term contracts in place relating to the fees it charges for processing waste as well as the off-take for the energy it generates.

AVR operates two waste treatment plants at Rozenburg in the Port of Rotterdam area and Duiven near the border with Germany. Together the two plants have a capacity to process 1,700 kilotonnes per year. The firm also has four transfer stations in the Netherlands with a handling capacity of 1,000 kilotonnes per year.

Given its jetty access at Rotterdam and the location of Duiven close to the German border, AVR has growth plans for processing imported waste.

HL Kam, group managing director of CKI, said AVR “fits well with CKI’s stringent investment requirements, generating immediate recurring cash flow with profitable and stable returns”.

In January this year, CKI paid HK$3.2 billion for New Zealand’s EnviroWaste, which has the largest landfill operation in New Zealand. In August 2011, it paid £2.4 billion (€2.8 billion; $3.8 billion) for UK water company Northumbrian Water, which has one of the largest wastewater and sludge treatment operations in the UK.

The AVR transaction is expected to complete in the third quarter of this year.