Jadwa Investment to sell GEMS

Saudi Arabia’s Jadwa Investment, one of the country’s largest privately owned investment banks, is working with Citigroup to sell its private equity investment in a waste management company, two sources told Reuters.

Jeddah-based Global Environmental Management Services (GEMS) collects, handles and disposes of petroleum and chemical waste and is also involved in wastewater treatment in the kingdom.

The transaction has been underway for a few months and expected to fetch at least $500 million, said the sources, declining to be named due to commercial sensitivities. Jadwa and GEMS did not respond to queries for comment by Reuters, while Citi declined to comment.

Jadwa acquired GEMS in 2014 from fund manager Ashmore Group and other local investors.

It did not disclose its investment partners nor the value of the acquisition at the time. However, two banking sources told Reuters at the time that the deal was valued at $300 million. Saudi Arabia recycles around 10 per cent of recyclable waste, with the remaining 90 per cent directed to landfill sites, according to studies from the kingdom’s sovereign wealth fund.

The Public Investment Fund last year announced plans to set up a waste management company and said the move would offer “the opportunity to recycle around 85 percent of this material, utilizing it as a source of alternative energy to be used in manufacturing.” (RTRS)