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Veolia Exits Mass Transit With $6.7 Billion of Asset Sales to Reduce Debt

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Dec. 6 (Bloomberg) -- Veolia Environnement SA, the world's biggest water utility, will sell 5 billion euros ($6.7 billion) of assets to cut debt as it exits the mass-transit business to focus on water, waste and energy services.

 

Veolia, which is outlining a turnaround plan at an investor day, will sell regulated water assets in the U.K., solid waste operations in the U.S., and quit the Transdev transport business. It also proposed a lower dividend.

 

The asset sales are "going to drive a profound transformation of our company," Chief Executive Officer Antoine Frerot said. "I am giving myself two years to carry it out."

 

Veolia's credit outlook was lowered by Fitch Ratings last month after the utility twice cut profit forecasts. Fitch said a "softer" economy could hurt the waste division, risking a repeat of the slump in demand Veolia saw in 2009 when carmakers and steel producers shut factories to weather the recession.

 

"The plan will reassure to some extent but the market wants to see proof that it will be carried out," said Chicuang Dang, an analyst at KBL Richelieu in Paris. "The road will be a long one because the effects of cost-cutting and asset sales won't be felt right away. This was Veolia's last chance."

 

Veolia rose as much as 4.5 percent in Paris trading before giving up gains and trading down 0.7 percent at 9.455 euros as of 2:59 p.m. local time. The shares have slumped 57 percent in the year to date.

 

 

 

Shrink Footprint

 

 

 

The asset sales are "higher than the anticipated" 3 billion euros, said Julien Desmaretz, a Paris-based analyst at Bryan, Gernier & Co.

 

Veolia will shrink its "geographic footprint" to about 40 countries from 77 in a bid to lower debt to less than 12 billion euros by the end of 2013. Net financial debt was 15 billion euros at the end of September.

 

Veolia said it plans to focus on central and Eastern Europe, China, France, waste operations in the U.K. and energy services in the U.S.

 

The utility proposed cutting the dividend to 70 euro cents a share in 2012 and 2013, compared with 1.21 euros for 2010.

 

It raised cost-cutting targets and confirmed that adjusted operating income will "decline" from last year.

 

"The amount of this reduction may be similar to that reported for the nine months ending September, 2011," the company said.

 

 

 

Cost Cuts

 

 

 

The net effect of cost-cutting on operating income will be 20 million euros next year, 120 million euros in 2013, 220 million euros in 2014 and 420 million euros in 2015, Veolia said in a presentation.

 

Veolia supplies water to more than 100 million people and handles about 63 million tons of waste.

 

Transdev was created after Veolia and French state-owned bank Caisse des Depots et Consignations agreed to merge their transport units last year.

 

"We will look for new shareholders for our transport business," Frerot said, since Transdev would have competed for investment "with other activities that we think are more important for the future."

 

The French water business faces the prospect of lower profitability and the threat of municipalities taking over water treatment operations, Veolia said, while the waste business is increasingly exposed to the industrial output.

 

The company lost half its market value, and the cost of insuring it against default reached a record, after saying in July that it wouldn't meet an earnings target.

 

The restructuring marks the end of the global expansion started by Frerot's predecessor Henri Proglio, who became chairman and CEO of Electricite de France SA in 2009 while remaining chairman of Veolia until last December. Proglio spent about 4 billion euros on acquisitions in 2007 and 2008, pushing the utility's operations into 77 countries from Argentina to South Korea.

 

"We are preparing the company for difficult times," Frerot said.

 

 

 

 

Read more: http://www.sfgate.com/cgi-bin/article.cgi?...L#ixzz1fmywgPpY

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Veolia Environnement SA (VIE), the world’s biggest water utility, will sell 5 billion euros ($6.7 billion) of assets to cut debt as it exits the mass-transit business to focus on water, waste and energy services.

 

Veolia, which is outlining a turnaround plan at an investor day, will sell regulated water assets in the U.K., solid waste operations in the U.S., and quit the Transdev transport business. It also proposed a lower dividend.

 

The asset sales are “going to drive a profound transformation of our company,” Chief Executive Officer Antoine Frerot said. “I am giving myself two years to carry it out.”

 

Veolia’s credit outlook was lowered by Fitch Ratings last month after the utility twice cut profit forecasts. Fitch said a “softer” economy could hurt the waste division, risking a repeat of the slump in demand Veolia saw in 2009 when carmakers and steel producers shut factories to weather the recession.

 

“The plan will reassure to some extent but the market wants to see proof that it will be carried out,” said Chicuang Dang, an analyst at KBL Richelieu in Paris. “The road will be a long one because the effects of cost-cutting and asset sales won’t be felt right away. This was Veolia’s last chance.”

 

Veolia rose as much as 4.5 percent in Paris trading before giving up gains and trading down 0.7 percent at 9.455 euros as of 2:59 p.m. local time. The shares have slumped 57 percent in the year to date.

Read More: Veolia Exits Mass Transit With $6.7 Billion of Asset Sales to Reduce Debt - Bloomberg

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Veolia Environnement SA (VIE), the world’s biggest water utility, will sell 5 billion euros ($6.7 billion) of assets to cut debt as it exits the mass-transit business to focus on water, waste and energy services.

 

Veolia, which is outlining a turnaround plan at an investor day, will sell regulated water assets in the U.K., solid waste operations in the U.S., and quit the Transdev transport business. It also proposed a lower dividend.

 

The asset sales are “going to drive a profound transformation of our company,” Chief Executive Officer Antoine Frerot said. “I am giving myself two years to carry it out.”

 

Veolia’s credit outlook was lowered by Fitch Ratings last month after the utility twice cut profit forecasts. Fitch said a “softer” economy could hurt the waste division, risking a repeat of the slump in demand Veolia saw in 2009 when carmakers and steel producers shut factories to weather the recession.

 

“The plan will reassure to some extent but the market wants to see proof that it will be carried out,” said Chicuang Dang, an analyst at KBL Richelieu in Paris. “The road will be a long one because the effects of cost-cutting and asset sales won’t be felt right away. This was Veolia’s last chance.”

 

Veolia rose as much as 4.5 percent in Paris trading before giving up gains and trading down 0.7 percent at 9.455 euros as of 2:59 p.m. local time. The shares have slumped 57 percent in the year to date.

Read More: Veolia Exits Mass Transit With $6.7 Billion of Asset Sales to Reduce Debt - Bloomberg

 

One word..........NICE!!!!!

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LMFAO Im done, Ed Mangano is looking at himself like a fool,

 

 

I got 3 words

 

 

MTA

 

 

wow what a way to end the year Happy Holidays

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Veolia isn't exiting the transit biz. They are just selling half their share. Trust and believe they aren't unloading the worlds largest private operator.

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Veolia Environnement SA (VIE), the world’s biggest water utility, will sell 5 billion euros ($6.7 billion) of assets to cut debt as it exits the mass-transit business to focus on water, waste and energy services.

 

Veolia, which is outlining a turnaround plan at an investor day, will sell regulated water assets in the U.K., solid waste operations in the U.S., and quit the Transdev transport business. It also proposed a lower dividend.

 

The asset sales are “going to drive a profound transformation of our company,” Chief Executive Officer Antoine Frerot said. “I am giving myself two years to carry it out.”

 

Veolia’s credit outlook was lowered by Fitch Ratings last month after the utility twice cut profit forecasts. Fitch said a “softer” economy could hurt the waste division, risking a repeat of the slump in demand Veolia saw in 2009 when carmakers and steel producers shut factories to weather the recession.

 

“The plan will reassure to some extent but the market wants to see proof that it will be carried out,” said Chicuang Dang, an analyst at KBL Richelieu in Paris. “The road will be a long one because the effects of cost-cutting and asset sales won’t be felt right away. This was Veolia’s last chance.”

 

Veolia rose as much as 4.5 percent in Paris trading before giving up gains and trading down 0.7 percent at 9.455 euros as of 2:59 p.m. local time. The shares have slumped 57 percent in the year to date.

Read More: Veolia Exits Mass Transit With $6.7 Billion of Asset Sales to Reduce Debt - Bloomberg

 

Living proof that Ed Mangano is as good with money as peter from family guy

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Well, people are worried about the new deal. I'm starting to wish I had spoken at the public hearing, but I had school.

 

Top Stories Item

 

And by the way, on the contract vote, unless they change their minds, the vote is 11-9, majority for yes. However, some votes are missing to complete the vote according to the article below:

 

New Questions Arise Over Privatizing Long Island Bus | Long Island Press

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Veolia is leaving.

 

VeoliaTransdev isn't, it will probibly just have a new name.

 

Veolia isn't leaving anything. They are only divesting half their share in the transit business, and some shares of their sanitation business. I know know why people keep saying they are leaving the made-transit biz, because they are not.

 

Same was said when GE announced it was selling NBC Universal to Comcast. They were only selling half the company, yet made it sound like they were selling all the assets.

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Veolia isn't exiting the transit biz. They are just selling half their share. Trust and believe they aren't unloading the worlds largest private operator.

 

Most likely what will happen is Transdev will buy the 50% stake of Veolia Transdev that is does not own. Only think will change will be a change in the name but business as always

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Veolia is leaving.

 

VeoliaTransdev isn't, it will probibly just have a new name.

 

Remember last year Veolia and Transdev merged their transportation/transit operations into a partnership name Veolia Transdev with both owning half the new company. This is the 50% stake that Veolia will be selling

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December 7, 2011 - Veolia Transdev (VT), parent company of Veolia Transportation emphasized its longstanding commitment to the U.S. and Canada transportation market following a statement that Veolia Environnement (VE), parent company of VT, will allow Caisse des Depots to purchase VE’s 50% interest in Veolia Transdev over the next two years.

 

Veolia Transdev is the largest private sector operator of public transportation in the world, with $10 billion in revenue and 5,000 transit contracts. Company officials maintain strong commitments to current contracts and anticipate robust future transportation business opportunities in North America.

 

Caisse des Depots, a 100 year-old, AAA-rated financial institution with $364 billion in total assets and equity of more than $50 billion, previously held a 50% stake in Veolia Transdev. Caisse des Depots remains strongly committed to its ownership interest in Veolia Transdev and will likely increase it in the near future, either on its own or with other investors.

 

“This transition in ownership will take place over the next two years and will not change the fact that Veolia Transdev is a leader in transportation worldwide, with the stability of 5,000 transit contracts, and with a major commitment to building our business in the U.S. and Canada,” said Jerome Gallot, CEO of Veolia Transdev worldwide.

 

“Further, the future change to our shareholder group, by an expansion of Caisse des Depot’s ownership or the inclusion of other shareholders is a positive step and will not impact our capacity to keep our commitments to our clients, or our vision for strategically expanding key markets”, he added. “This will allow Veolia Transdev to strengthen and expand our capabilities, to carry on building our business, and benefit from improving our access to capital.”

 

Veolia Transportation’s contracts with transit agencies, municipalities, and other governing bodies will not be affected by these actions on the part of the parent company. In a letter sent to over 200 transit clients in North America, Mark Joseph, CEO of Veolia Transportation, emphasized that the company will continue to work together to improve public transportation and passenger mobility. “Our management teams locally and throughout North America will not change and we will continue to have the support of Veolia Transdev as well as the talents that come with being the largest multi-modal transportation service provider both here and in the world,” Joseph said.

 

Veolia reaffirms commitment to North American transportation market - News - METRO Magazine

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One question though about this: With respect to LIB/NICE, might new due diligence need to be done? For his part, Ed Mangano has expressed reservations.

 

What I understand is that Veolia Transdev will still exist in the Eurasian landmass and Australia, but the North American transit operations will all be sold to someone else as a package.

 

I think that NIFA might just say: Hold up here, with this as valid grounds for doing so.

Edited by aemoreira81

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One question though about this: With respect to LIB/NICE, might new due diligence need to be done? For his part, Ed Mangano has expressed reservations.

 

What I understand is that Veolia Transdev will still exist in the Eurasian landmass and Australia, but the North American transit operations will all be sold to someone else as a package.

 

I think that NIFA might just say: Hold up here, with this as valid grounds for doing so.

 

No Veolia Transdev now owns and operates Veolia Transportation and will keep ownership (meaning Transdev will either buy out Veolia Environnement's share of the partnership or look for a new partner to buy Veolia Environnement's stake in the partnership). This transaction will take up to 2 years to go through all the legal steps. This is more a release to let their clients know its business as usual before, during and after the ownership change.

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Think more of this when First Transportation took over Laidlaw/Greyhound or when Stagecoach took over the smaller companies that made up Coach USA and Coach Canada, Only thing that changed were the name and ownership, service to clients remained the same.

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