Ambipar (AMBP3) expects a reduction in leverage and capex with fleet renewal and agreements.

The company, specialized in waste management, stated that 502 yellow line vehicles were sold to the CHG-Meridian group and 1,607 heavy vehicles to Addiante.

SÃO PAULO (Reuters) – Ambipar (AMBP3) announced that it has closed agreements for the sale of used vehicles totaling 717 million reais, aiming to renew its Brazilian fleet, which is expected to contribute to a reduction in capital expenditures (capex) and the company’s leverage.

The company, specialized in waste management, stated that 502 yellow line vehicles were sold to the CHG-Meridian group and 1,607 heavy vehicles to Addiante, a joint venture between Randon Serviços e Participações and Gerdau Next, according to a press release on Thursday.

“The operations will allow Ambipar to renew its fleet through the immediate leasing of new 0km assets and the temporary leasing of some of the used assets sold, with all yellow line assets manufactured by John Deere,” Ambipar stated in the release.

“The monthly rental cost will be 27 million reais, under five-year contracts, with a complete fleet renewal in a maximum of two years,” it added.

The company expects capex savings from the renewal of 1.6 billion reais over the next two to three years, as well as a reduction in financial leverage—measured by the ratio of net debt to EBITDA—to 2.4 times, down from 2.8 times.

According to Ambipar’s CFO, João Arruda, the renewal agreements will reduce maintenance costs, bringing greater efficiency and standardization to the fleet.

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