Transpacific Industries (TPI), a leading industrial waste recycling and management provider in Australia, has entered into an agreement to sell its New Zealand business to a wholly owned subsidiary of Beijing Capital Group for $950 million.
Completion of sales is expected by the end of June 2014 subject to New Zealand Overseas Investment Office and Chinese regulatory approvals, Transpacific (TPI) said.
The acquisition will provide Beijing with access to pollution reduction technology, Beijing Capital Group said.
Beijing Capital Group is one of China’s top 500 enterprises and a leading state owned infrastructure enterprises with specialist expertise in water treatment, waste management, mass transit railway and toll roads.
Robert Boucher, TPI chief executive said the sale will give the company increased financial flexibility. Proceeds from the sale will be utilized to refinance debts and fund future investments for the company, Transpacific said. It would also consider resumption of dividends in the near term.
“We will look to enhance our Australian waste management businesses, capture long term growth opportunities and generate improved shareholder value,” Boucher said.
Beijing Capital Group is planning to invest in and develop the New Zealand business.
There are just two players in the New Zealand refuse collection and landfill business: Transpacific Waste Management and Envirowaste, a smaller competition, which was sold last year.