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Biffa lenders expected to reject Clearbrook, JP Morgan offer

9 Aug 2012

Institutional lenders to Biffa, the ailing waste services business backed by Montagu Private Equity and Global Infrastructure Partners (GIP), are reportedly expected to shun a £520m cash offer to avoid a substantial writedown on the company’s £1.1bn of loans.

Reuters reported the news, citing unnamed banking sources.

Reports on Wednesday confirmed Biffa had received a £520m cash offer from a consortium of investors comprising Clearbrook Capital, JP Morgan recycling specialist Chinook Urban Mining.

The company, which has struggled under a mountain of debt since the economic crisis took hold, received the offer last week through PricewaterhouseCoopers, which is advising Biffa’s 76 lenders.

“This is a serious offer and the only firm bid on the table, but some of the bankers appear to be blocking it and it is difficult to get a consensus among so many banks,” a source told the Guardian.

The offer follows previous negotiations over a deal that would see the company handed over to Veolia, Suez and Pennon in return for any future merger synergies, the Daily Telegraph reported back in March.

Biffa has struggled under the weight of more than £1bn of debt since the economic crisis took hold, the loan covenants for which are due to be met this summer.

Both Montagu and GIP are subsequently under pressure to sell the company quickly.

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