Shanks sells half its share in Wakefield Waste PFI for £30m

Wakefield Council’s cabinet will be asked to approve the sale by Shanks Group of 49.9 per cent of its equity in the South Kirkby plant next month.

In an announcement to the London Stock Exchange, Shanks said it had agreed a sale worth around £30m to a company called Equitix Ltd.

The waste plant was built under a 25-year Private Finance Initiative (PFI) deal between the council and Shanks and was designed to process most of the district’s rubbish instead of it being sent to landfill.

Under the £750m scheme, the council makes repayments to Shanks for the waste plant over the lifetime of the PFI contract up to 2038.

Glynn Humphries, Wakefield Council’s service director for environment and Streetscene, said: “Shanks have assured us that this will have absolutely no effect on the waste management contract.

“The South Kirkby recycling facility is, and will remain, fully operational as will all our facilities currently operated by Shanks.

“Shanks have confirmed that they remain committed to Wakefield and will ensure that any new partnership can deliver the full requirements of the contract.”

Along with 49.9 per cent of its equity in Wakefield Waste PFI, Shanks will sell 100 per cent of the subordinated debt - part of the financing behind the PFI scheme - to Equitax, which specialises in buying up PFI deals.

Latest accounts show London-based Equitix is owned by Tetragon Financial Group Ltd, a company registered in Guernsey. Firms on the channel island are not subject to UK taxation.

Shanks decided to sell just under half its share of the PFI after its profits were hit by a decline in the oil and gas markets.

The company’s announcement said: “The transaction has been signed by Equitix, has full bank consent and requires the formal approval of Wakefield Council which will be considered at the council’s Cabinet meeting in March.

“The transaction will result in a profit on disposal of approximately £11m.”

Peter Dilnot, group chief executive of Shanks, added: “Shanks remains wholly committed to the success of our flagship Wakefield contract as both an operator and an ongoing investor.”