* Deal to cut Veolia net debt by around $1.82 bln
* Veolia aims to sell 5 bln euros of assets by end-2013
* Company seeking sale of stake in Veolia Transdev
By James Regan and Neha Alawadhi
PARIS/BANGALORE, July 19 Veolia Environnement
is selling its U.S. waste management arm to
infrastructure fund Highstar Capital for $1.9 billion, marking
another step forward in the French company's efforts to cut debt
and shifting attention to the planned sale of its transport
The deal follows the sale last month of Veolia's majority
stake in its regulated UK water business, also for around $1.9
Analysts said the prices achieved in both sales were higher
Debt-laden Veolia is restructuring as Chief Executive
Antoine Frerot unwinds much of an expansion plan undertaken by
the company's founder and former CEO Henri Proglio.
The company had debt of 14.7 billion euros at the end of
last year and is aiming to sell assets worth 5 billion by the
end of next year. The U.S. waste sale will cut net debt by $1.82
The deal also means 60 percent of the disposal programme is
now done, but the group's attempts to exit its transport joint
venture with French state bank Caisse des Depots (CDC), up for
sale since December, could prove more tricky.
"The (waste and water) assets already sold showed a lot of
appetite from the market, which doesn't seem to be the case for
Veolia Transdev, the other significant asset identified by the
group in its disposal programme," CM-CIC Securities analyst
Olivier Bails said in a note on Thursday.
A possible "positive surprise" could, however, come from a
sale of Veolia's 24.95 percent stake in Berlinwasser, which
provides water for the German capital and is 50.1 percent
state-owned, with the rest held by utility RWE,
Cheuvreux analysts said.
Reuters reported last week that Highstar had lined up
financing and made a final offer for Veolia's U.S. waste
business, Veolia ES Solid Waste Inc.
New-York based Highstar manages more than $5.6 billion
through its infrastructure funds and owns waste management
businesses in the north east and south east of the United
States. Its waste business has been acquiring competitors,
completing 30 acquisitions since 2005, according to its website.
Veolia ES Solid Waste, based in Milwaukee, Wisconsin, is one
of the largest solid waste companies in the United States, with
72 collection facilities and 29 landfill facilities in North
Veolia said it expected to complete the sale to Highstar by
the end of the year, subject to approval from U.S. competition
"In the U.S. waste business, Veolia Environnement will
continue to grow its activities in hazardous waste and
industrial services," Veolia said in a statement.
Shares in the group, which are up around 10 percent from the
start of the year after losing 61 percent in 2011, were up 1.5
percent by 1006 GMT.
Barclays and Credit Suisse advised Veolia
on the transaction, while Highstar was advised by Deutsche Bank