One of Britain’s greatest engineering names has left the country to focus on the Benelux recycling market.
Renewi is not a household brand, but it used to be known as Shanks, and before that, Shanks & McEwan. It was one of Scotland’s great industrial firms, whose Victorian history was built on the construction of railways.
Shanks had long since moved away from civil engineering by the time it rebranded as Renewi during the last decade. The company was a pioneer in waste management in the 1980s and 90s. It cleared bins, put rubbish on landfills, and, more recently, focused on recycling waste and making energy.
Renewi’s rebranding brought a new focus to its acquired businesses in The Netherlands and Belgium.
It announced on Thursday that it would be selling its last businesses in Britain. These include municipal bin clearing and recycling operations located in Barnsley and Doncaster in Yorkshire; Argyll &Bute Council in Scotland and Cumbria County Council in Scotland; and the East London Waste Authority.
Biffa is now taking over the UK Municipal contracts, and the workers, after the former listed waste group was taken over last year by private equity.
The details of the transaction show how eager Renewi was to get out of the UK.
Biffa pays only a nominal amount for the contracts. Renewi retains the debts of these businesses. It said that the deal will have an impact of €154 million in cash and a net loss €57 million.
Renewi is headed by former BT boss Ben Verwaayen. He said, “The exit from the UK will immediately improve our profit margins and cash flow.” Now we will focus our efforts on the most advanced and attractive recycling markets in Europe.
Biffa refused to comment on the possible ways it could turn its business around.
Renewi began as Shanks & McEwan at the end of the 19th century. Guy Shanks was an engineer and Andrew McEwan an architect.
In the 1980s when the McEwans sold their holdings, they had evolved into a construction group with interests in quarrying. It then moved into waste management and landfills with a deal with London Brick, the land holdings of the Hanson conglomerate. The company floated in 1988 and left construction following the recession of the 1990s. Its name was later changed to Shanks.
Renewi has been listed on both the London Stock Exchange as well as Euronext. It did not comment on the question of whether or not it would retain its London listing. Renewi shares rose by 6p or 1 percent to close at 639p. This is close to the 15-month high.
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