Vol 13, Issue 6 (June 2012)

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Need to know

  • FLAGGING SALES

    Sacyr Vallehermoso has given the clearest signal yet that it is willing to consider a sale of its environmental services division, Valoriza.

  • YARD SALE

    Veolia’s attempts to step up its asset disposals programme seem to be losing steam.

  • SINKING THE ARMADA

    The regional authorities in Madrid have put the sale of Canal Isabel II on ice.

  • GULF ACTION

    Saudi Arabia’s new economic cities are back on the agenda, with planners trying a change of tack to get things moving at the long-awaited Jazan and King Abdullah Economic Cities.

  • MEMBRANES IN CHINA

    The Chinese government has announced plans to develop a RMB100 billion-a-year ($15.9 billion) domestic membrane industry by 2015 – more than tripling the size of the sector as it stands today.

Analysis

General

  • Sacyr showcases its water business

    Valoriza Agua is the fastest growing division within Sacyr. With an enterprise value of €470 million, can the group afford not to sell its most prized asset?

  • Águas de Portugal maps out its future

    The merger of bulk and retail water services in Portugal will result in a series of private concessions being rolled out next year. Not everyone is happy with the reform process.

  • UK results show return to stability

    The second year of the current pricing regime saw a modicum of stability return to the UK water and sewerage companies. Full regulatory disclosures next month will reveal the true extent of the bad debt situation.

  • BT pays up for a seat on Thames’ board

    The prospect of a seat on the board of the UK’s largest water utility is likely to have resulted in an attractive exit price for two of Macquarie’s infrastructure funds.

  • Saur president faces tough task

    The expiry of Séché’s call option on Saur last month has created something of a stalemate between the two companies. Saur’s new president Michel Bleitrach has his work cut out to resolve the situation.

  • Degrémont reshapes its industrial business

    The merger of Ondeo Industrial Solutions into Degrémont reunites all the industrial water expertise in the Suez Environnement group under one banner. CEO Rémi Lantier explains the rationale behind the move.

  • EC renews calls for Czech water regulator

    Czech water utilities face the threat of reduced EU funding unless an independent sector regulator is established. The move could spur consolidation in the industry.

  • Making a credible water pricing proposal

    George Day spent 12 years at Ofwat, the economic regulator for England and Wales’ water and sewerage utilities. Here he offers some thoughts for water utilities on how to justify pricing proposals.

  • Write-offs complete the clean-up at Ovivo

    GLV shares lost nearly 30% of their value after the company announced its full-year results this month. Lower sales, lower profits and big write-offs in the Ovivo water technology subsidiary were to blame.

  • Crunch time for Culligan Man

    A new lawsuit is threatening to derail the restructuring of the filtration specialist. What are the implications for other highly levered companies?

  • Saudi opens up new city utility plans

    Two new cities on the Kingdom’s west coast struggled to pin down utility investors during the financial crisis. A new open bidding process for city-wide concessions is a bold move – but brings a host of new problems.

  • Doosan settles Barka dispute with SMN

    The firm has reached an amicable settlement over the Omani IWPP. It can now turn its eyes toward Saudi Arabia.

  • Degrémont confirms Samra expansion

    The French company has put pen to paper on the expansion of Jordan’s largest WWTP after nearly three years of negotiation. Improved borrowing conditions allowed it to refinance the project’s existing debts at the same time.

  • HSBC named as advisor on Mirfa IWPP

    The contract to advise on Abu Dhabi’s latest IWPP is another feather in the cap for the bank’s project finance team in the Middle East. Technical challenges mean procurement may not be a straightforward matter.

  • New cities, new methods

    Planners are considering the possibility of full water and wastewater concessions in two new Saudi cities. What are the potential pitfalls?

  • Itochu casts itself in a new mould

    Recent deals in the UK and India have seen the Japanese trading house expand its traditional role in the water market. It is eyeing up to $1 billion of investment in the sector over the next five years.

  • Moving in for the 3 million m3/d merger

    Salcon is ramping up its acquisition activity in anticipation of hiving off its Chinese project portfolio. Executive director Eddy Leong spoke to GWI about his ambitions.

  • The Holy Grail of infrastructure investing

    A new pan-Asian fund will leverage money from regional governments and the ADB to support infrastructure projects. Its risk profile means it will stop short of investing equity itself.

  • Darco emerges from the dark

    The troubled project developer released an encouraging set of 2011 results on 30 May. Doubts remain over its ability to continue as a going concern.

  • Dining at the chaebol table

    Charles Bodhi investigates the mystical relationship between big Korean industry and government.

  • Separating the vision from the reality

    The Chinese government’s near-term ambitions for its domestic membrane industry make sobering reading for international suppliers. What are the challenges?

  • KEC International narrows its water focus

    The water business of India’s RPG Group has more closely defined the areas in which it intends to play. CEO Dilip Shukla sees a big future in wastewater management.

  • Australia’s CSG water market shrinks overnight

    New figures outlining the average volumes of produced water which will need to be treated in Australia’s CSG industry might suggest limited opportunities for treatment specialists. Equipment supply is only part of the story.

Brief

  • EUROPE WATER IN BRIEF

    OHL has completed the sale of its environmental division Inima to GS Engineering & Construction and Copainima, a Korean pension fund, for an equity value of €231 million, netting the group a €43 million capital gain.

  • Americas Water IN BRIEF

    A new survey by Black & Veatch has found that over 31% of US water and wastewater utilities are considering the use of public-private partnerships.

  • MIDDLE EAST WATER IN BRIEF

    Minority shareholders at developer International Power have approved a £6.4 billion ($10 billion) share buyout by GdF Suez.

  • ASIA WATER IN BRIEF

    The consolidation continues among international environmental consultants, with Lahmeyer announcing the purchase of a 70% stake in Philippines-based water and energy consultancy IDP Consult earlier his month.

GWI Water Index

  • Water stocks leave broader market behind

    Contagion-resistant water utility stocks were the best place to be this month, as the GWI Water Index outperformed major stock indices on every continent. Declines elsewhere were a catalyst for increased share buyback activity.

Market Profile