Home Business Severn Trent, UK water firm, plans £1bn fundraising to combat pollution.

Severn Trent, UK water firm, plans £1bn fundraising to combat pollution.

Severn Trent, UK water firm, plans £1bn fundraising to combat pollution.

Water company Severn Trent plans to raise £1 billion through a new share issue in order to address sewage spills and pollution. This comes after the company was fined earlier this year for numerous spills between 2018 and 2022. The share issue will involve £500 million from institutional investors, another £500 million from the Qatar Investment Authority, and up to £7 million from retail investors. The funds will support a five-year spending plan of £12.9 billion, which includes improving capacity and reducing overflow spills and pollution. Additionally, the plan aims to create 7,000 jobs and provide financial support for customers who struggle to pay their water bill.

Water companies in the UK are preparing to submit their draft business plans to industry regulator Ofwat, which will likely result in significant bill increases to fund infrastructure investments. Currently, water bills average £448 per household, and the proposed plans could lead to bills rising by several hundred pounds by the end of the decade. The exact increase is yet to be determined, as Ofwat is not expected to approve the plans until December next year. Severn Trent’s share issue, led by Bank of America Securities and Morgan Stanley, aims to finance its spending plan and address the fine imposed by the Environment Agency in May.

Despite rare equity injections in the water sector, Severn Trent joins other companies like Anglian Water, Southern Water, Thames Water, and Yorkshire Water, which have all received financial support from their shareholders in recent years. The announcement of the share issue highlights Severn Trent’s commitment to improving its environmental impact and investing in infrastructure. This move aims to address pollution issues, create job opportunities, and provide support to vulnerable customers. By raising £1 billion, the company intends to fund its ambitious five-year plan and meet regulatory requirements, while also acknowledging the need for increased investment and accountability in the water industry.

Source link


Please enter your comment!
Please enter your name here