* Transpacific sells NZ waste business to Chinese state-run
firm for NZ$950 mln
* Sale gives Beijing govt access to pollution-reducing
* Transpacific can now refinance debt, consider return to
* Unit is biggest waste management firm in New Zealand
By Byron Kaye
SYDNEY, March 3 Beijing Capital Group
will buy New Zealand's biggest waste management firm
from Australia's Transpacific Industries Group Ltd for
almost $800 million, enabling the Chinese state-owned company to
acquire technology that could help combat chronic pollution in
the capital and beyond.
Demand for waste management is growing in China as the
government launches a raft of measures to tackle environmental
degradation, which has become a politically sensitive issue.
Transpacific's New Zealand waste business specialises in
environmentally friendly landfill methods, odour management and
hazardous waste handling.
"The Chinese understand how to recover the plastics and the
metals from landfill and reuse them," said Mark Glover, director
of Australian waste management consultants Eco Waste Pty Ltd.
"The model now needs to be expanded so that we start looking at
all the biomass and organic materials."
Much of Northern China was blanketed in a toxic smog
recently, and the authorities raised the pollution alert to its
second-highest danger level after drawing public ire for its
ineffective response to the crisis.
China's government will spend 100 billion yuan ($16.3
billion) over three years to deal with the pollution in Beijing,
according to state media reports. It also aims to treat 90
percent of all urban waste by the end of 2015, housing ministry
Australia and New Zealand waste management companies are
well placed to benefit from China's demand, as they are
experienced in landfill technologies and sustainable waste
management because of government levies that encouraged these
practices, analysts say.
People with knowledge of the Transpacific sale said Beijing
Capital Group (BCG), which is owned by the Beijing municipal
government, was keen on tapping Transpacific's expertise, and
had not bought the waste management unit for re-sale.
"The investment carries significant...mutual technical and
commercial benefits," BCG Chief Executive and Deputy Chairman
Wang Hao said in a statement.
The deal comes just over a year after Hong Kong's
family-owned Cheung Kong Infrastructure Holdings bought
Envirowaste, New Zealand's second largest waste management
company behind Transpacific, for NZ$490 million.
TRANSPACIFIC ALSO BENEFITS
The sale also advances Brisbane-based Transpacific's push to
exit non-core businesses and focus on its Australian waste
management operations. Transpacific can now refinance its debt
and resume paying dividends, the company said in a statement,
adding that it expected the sale to be completed in June.
Transpacific sold the unit for NZ$950 million ($798
million). In August, Transpacific sold its commercial vehicles
business to U.S.-based Penske Automotive Group for A$219
million ($195.97 million).
A source told Reuters last week that BCG had been up against
three other bidders for the New Zealand business, including
private equity giant Carlyle Group, a consortium
involving investment manager Morrison & Co, two Maori tribes and
infrastructure investor Infratil Ltd, and another
BCG was advised by HSBC Holdings Plc and Deutsche Bank ran
the sale for Transpacific.