TWO US private equity firms are vying for a controlling stake in Greenstar, Ireland’s biggest waste company.
Gores Group and Anchorage Capital Partners have both tabled bids. As part of the proposed deals, NTR, the current owner, will retain a small minority holding while Greenstar’s bankers will take a sharp haircut on the €86m owed.
Gores held intense negotiations with NTR and Greenstar’s banks this weekend, sources said. Rival bidder Anchorage is represented in Ireland by Dan O’Connor, former executive chairman of AIB and a director of the building materials group CRH.
A preferred bidder should be announced within a fortnight. Sources said the private equity companies will pay as little as €50m-€60m for the business debt-free. NTR put a price tag of €160m on Greenstar in 2010.
Both bids are likely to be the subject of further negotiation.
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Under the Gores proposal, NTR’s stake is expected to be in the region of 10%-15%. It is understood that up to 50% of the Greenstar gross debt could be written off.
Greenstar has been informally up for sale for the best part of two years. Late last year, the process was formalised when Hawkpoint was appointed adviser on the sale.
Over a 10-year period, Greenstar invested €320m in landfill, recycling and collection and a further €44m in goodwill on acquisitions.
The business has suffered a steep decline, as landfill volumes plummeted and prices collapsed. Earnings before interest, tax, depreciation and amortisation fell from €55.6m in 2008 to a forecast €16m for the year to this March.
NTR last year took a €62m writedown on its Greenstar investment. Concerns over the refinancing of its borrowings, due for repayment later this year, prompted the sale. Its syndicate of seven lenders includes Bank of Ireland, Bank of Scotland and Ulster Bank.
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The sale of Greenstar will represent a further step in the reorganisation of NTR. It recently sold most of its stake in Green Plains Renewables, a US bio-ethanol company.