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Waste giant Biffa recycles plan to raise £300m in London float

One of Britain's biggest waste disposal companies will this week unveil plans to raise up to £300m from a flotation that will be the City's largest since the UK's vote to leave the European Union.

Sky News has learnt that the board of Biffa has signed off on plans to announce a stock market listing on Thursday valuing the company at more than £1bn.

City sources said that Biffa planned to raise between £250m and £300m from its initial public offering, which is expected to see its shares begin trading next month.

The company, which was forced into an emergency financial restructuring in the aftermath of the banking crisis, will also announce the appointment of two new independent directors.

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David Martin, who sits on the board of Ladbrokes (LSE: LAD.L - news) , will become Biffa's senior independent director, while Ken Lever, the former chief executive of Xchanging (Frankfurt: HOV.F - news) , the business services group, is also joining the waste management company's board.

People close to Biffa said that its flotation announcement was likely to signal the intention of its management team to use its IPO proceeds to consolidate a fragmented industry.

The company is also expected to say that new regulatory requirements for waste segregation will also provide additional commercial opportunities.

Biffa has drawn interest from potential buyers during the last year, including Keppel Corporation, a Singaporean rival, and Apollo Management, the buyout firm.

In recent months, however, it has been focused on going public as a means of accelerating its expansion plans.

The company, which employs more than 7,000 people, serves 2.4 million households across the UK and manages more than 6 million tonnes of waste annually.

Employees are expected to be given shares in the IPO, according to one source.

In its 2016 financial year, Biffa recorded underlying pre-tax profits of £122m on revenue of £927.5m.

Roughly 10% of last year's revenues came from energy production from landfill gas and food waste.

Biffa operates one of the most recognisable fleets of branded vehicles in the country, with 2,500 waste collection trucks, some of which are powered by biofuel from waste cooking oil.

Once part of water company Severn Trent (Other OTC: STRNY - news) , Biffa was spun out into a separate listed business before being taken over by a consortium comprising high street lender HBOS, Global Infrastructure Partners and Montagu Private Equity just before the financial crisis.

In 2008, Biffa was valued at £1.7bn including debt, but a restructuring deal agreed in 2012 wiped out much of the company's borrowings and saw senior lenders take control of the company.

Current customers in the commercial market include J Sainsbury (Other OTC: JSAIY - news) , Royal Mail (LSE: RMG.L - news) and Pret a Manger, while in the domestic rubbish collection sector, Biffa is the second-largest player behind Veolia.

Biffa's main shareholders are now the hedge funds Angelo Gordon, Avenue Capital and Sankaty Advisors, although Ian Wakelin, the chief executive, and his senior management team also own shares.

They are being advised on the flotation by Rothschild, while Citi, JP Morgan, HSBC and Peel Hunt are handling the IPO.

Biffa declined to comment.