DUBAI Nov 1 Ashmore Group Plc is
engaged in discussions to offload its majority stake in a Saudi
waste management firm, two sources aware of the plan said, with
a sale likely seen raising about $250-$350 million for the fund
London-based Ashmore has identified two parties as potential
buyers for its around 65-percent stake in Global Environmental
Management Services (GEMS), and is currently in the process of
picking a bidder to hold exclusive talks, one of the banking
sources said, speaking on condition of anonymity as the sale
process has not been made public.
Ashmore has appointed Bank of America Merrill Lynch
to assist with the sale process, the sources said.
The source did not reveal the name of the bidders.
Jeddah-based GEMS and Bank of America were not available for
comment. Ashmore declined to comment.
Ashmore, headed by billionaire Mark Coombs, has capitalised
on the explosion in investor interest in emerging markets in
Though widely known to be an investor in listed equities,
the firm also invests in unlisted firms such as GEMS for
investors in its private equity and alternative investment
GEMS provides services such collection, handling and
disposal of petroleum and chemical wastes and is also involved
in waste water treatment in Saudi Arabia.
Amid an industrial and infrastructure boom in the Gulf's
largest economy, demand for such services has seen a steady
increase over the years, a second source said.
The kingdom is home to companies such as Saudi Aramco, the
world's top oil exporter and Saudi Basic Industries Corp
, one of the world's largest petrochemical companies.
Ashmore funds started investing in GEMS in the
fourth-quarter of 2008 and then subsequently in the first
quarter of 2009, Ashmore said in a filing in April.
"There have been several subsequent investment rounds to
fund capacity increases and the consolidation of shareholdings,"
it said without providing figures on its current ownership or
the amount of investments.
"Shareholders have initiated discussions regarding several
possible corporate events (merger, sale, third party funding),"
it said at the time.
GEMS' year-to-date earnings before interest, tax,
depreciation and amortisation (EBITDA) -- a key industry figure
-- had increased 43 percent versus the year-ago period, Ashmore
said in the filing, adding management expected to close the year
"very close to the initial targets."
Ashmore had assets under management of $78.5 billion as at