Brookfield explores sale of biofuel supplier

Brookfield Business Partners LP is weighing a sale of U.k.-based biofuel provider Greenergy, according to people familiar with the matter.

The investment firm is working with Citigroup Inc. and HSBC Holdings PLC to gauge interest in Greenergy from potential suitors, the people said, asking not to be identified discussing confidential information.

Deliberations are at an early stage, and there’s no certainty they’ll progress to a formal sale process, the people said. Representatives for Brookfield and Greenergy declined to comment, while spokespeople for Citigroup and HSBC didn’t immediately respond to requests for comment.

Greenergy was founded in 1992 as a supplier and distributor of low-emission transportation fuel. It buys waste oil and converts it into renewable biofuel, which it then supplies to the U.K., Ireland, Canada, Brazil and the Middle East, according to its website.

The company generated 137.6 million pounds (US$195 million) of adjusted earnings before interest, taxes, depreciation and amortization in 2019, according to its latest annual report.

Demand for transportation fuels fell last year as the spread of COVID-19 saw countries around the world place tough restrictions on domestic and international travel. Signs of a recovery in fuel sales have begun to emerge, particularly in countries with high levels of coronavirus vaccinations, such as the U.K.

Brookfield Business Partners is a listed arm of Us$600-billion-plus investment firm Brookfield Asset Management Inc. that backs companies in the business services and industrial sectors. It acquired a controlling stake in Greenergy in 2017 for an undisclosed amount and has since helped it grow, in part through acquisitions.

In April, Greenergy completed a purchase of Amber Petroleum, a fuel retailer and distributor based in Ireland. Last year, Greenergy merged with BG Fuels, a Canadian gas station operator also backed by Brookfield Business Partners.