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FRANKFURT/MADRID (Reuters) - European private equity-owned metals recycling group Befesa is preparing a stock market listing in a deal potentially valuing the group at up to 1.2 billion euros ($1.3 billion), people close to the matter said.
Buyout group Triton has asked Goldman Sachs (GS.N) and Citi (C.N) to organize the listing as global coordinators later this year, the people said, adding that stock including new shares worth about 300 million euros may be sold.
Befesa, which is headquartered in Luxembourg, could reach a market capitalization of 1 billion to 1.2 billion euros in the initial public offering, they said.
Triton and Goldman Sachs declined to comment, while Citi was not immediately available for comment.
The company is hoping to benefit from buoyant stock markets and a nascent recovery of global equity listings after a 2016 slump.
Befesa specializes in recycling steel dust from the steel and galvanizing industry and salt slags from the aluminum industry and is a former unit of Abengoa (ABG.MC), which sold the company to Triton in 2013 for 850 million in cash, or 1.1 billion euros including debt.
Befesa posted a decline in earnings before interest, tax, depreciation and amortization to 97 million euros in the first nine months of 2016 on sales of 518 million euros, citing depressed metals prices. 2016 figures will be published on April 6.
Iron, zinc and aluminum prices have picked up substantially since October.
The company has a market share of more than 50 percent in Europe's steel recycling market, according to a company presentation, and a more than 60 percent share in the market for recycling aluminum residues.
Each year, its roughly 1,900 employees turn about 2.2 million tonnes of residues into 1.3 million tonnes of new materials.
Last year, Befesa scouted market interest for its small Industrial Environmental Solutions unit, which specializes in services like industrial cleaning, soil decontamination and plastic recycling, but ended up keeping it.
Under Triton's ownership Befesa has invested in its plants and acquired companies such as Spanish industrial chemical cleaning group Solarca and has sold some non-core assets.
For Befesa, an IPO would mark a return to the stock market. The company was listed in 1999. But only a year later, Spanish renewable energy and engineering company Abengoa acquired 91 percent of the company and integrated it into its environmental services unit.
Abengoa has been going through major restructuring and said in February it was close to wrapping up a debt restructuring and barely escaped bankruptcy.
Editing by Georgina Prodhan/Ruth Pitchford