Beijing Capital Weighs Sale of $1 Billion New Zealand Waste Unit

(Bloomberg) -- Beijing Capital Group Co. is exploring a sale of its waste management unit in New Zealand for about $1 billion, people with knowledge of the matter said.

The state-owned firm has asked investment banks for proposals on the potential divestment of Beijing Capital Waste Management NZ Ltd., said the people, who asked not to be identified as the information is private. Beijing Capital Group could also consider selling a partial stake in the business, one of the people said.

Deliberations are at an early stage and Beijing Capital could decide to keep the business, the people said. Beijing Capital did not respond to requests for comment.

The prospective deal is riding on the momentum of an industry that offers strong cash flows and rising public awareness of waste recycling. Macquarie Group Ltd.’s infrastructure unit this month acquired Australian waste management firm Bingo Industries Ltd. for about A$2.5 billion ($1.8 billion). Beijing Enterprises Holdings Ltd. has considered a sale of its overseas waste treatment unit for about $2 billion, Bloomberg News reported Wednesday. Platinum Equity agreed in June to buy Spanish waste management firm Urbaser SA from the Chinese environmental services group China Tianying Inc.

Beijing Capital bought Transpacific Industries Group Ltd.’s New Zealand business for NZ$950 million ($667 million) in 2014. The state-owned firm then renamed the business as Beijing Capital Waste Management NZ, whose operations cover the entire industry chain of waste collection, transfer, separation and landfill as well as liquid waste disposal and waste recycling, according to its website.

The waste management unit has five landfills in New Zealand and operates 29 refuse transfer stations and more than 800 specialized waste collection vehicles. It has over 1,200 employees and handles more than 8,500 tonnes of waste per day.

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