In this March 16, 2018 photo, Hong Kong's richest man, Li Ka-shing, gestures during a press conference in the city. (ANTHONY WALLACE / AFP)

AVR, a Dutch waste processing company controlled by an arm of Hong Kong billionaire Li Ka-shing’s group, has emerged as the preferred bidder for Amsterdam’s AEB, according to people familiar with the matter.

The CK Infrastructure Holdings Ltd-backed firm is in advanced talks with AEB’s owner, Amsterdam’s municipal government, about a deal that could value AEB at more than 400 million euros ($453 million), the people said, asking not to be identified as the information is private.

AVR submitted the highest bid, ahead of other parties including financial investors, the people said.

Discussions are ongoing and could fall apart, and the owners could decide to sell to another bidder, the people said. 

Independent since 2014, AEB processes residual waste from municipalities and companies, extracts as many raw materials as possible and incinerates what’s left to supply electricity and heat to households and businesses, according to the company

Representatives for CK Infrastructure and the city of Amsterdam declined to comment, while AEB said it won’t comment as the bidding was still on. An AVR spokesman couldn’t immediately be reached for comment.

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AEB processes 1.4 million tonnes of waste a year, and traces its history to the turn of the 20th century when Amsterdam introduced its waste incineration plant, according to its website. 

Independent since 2014, it processes residual waste from municipalities and companies, extracts as many raw materials as possible and incinerates what’s left to supply electricity and heat to households and businesses, according to the company.

The government representing the Netherlands’ capital announced in April that it had started an auction to sell the entire company, and expected the sale to continue into the second half of 2021.

CKI, Power Assets Holdings Ltd and Li’s charity arm bought AVR in 2013 for 943.7 million euros. The infrastructure unit owns 35 percent of AVR’s parent Dutch Enviro Energy Holdings BV, while Power Assets owns another 20 percent, according to CKI’s website.

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In March, the CK Group’s real estate arm announced plans to buy stakes in four infrastructure firms, including Dutch Enviro Energy, from Li’s charity arm for HK$17 billion ($2.2 billion).