TIDM31HI
RNS Number : 7183Q
SW (Finance) I PLC
19 October 2023
19 October 2023
SW (FINANCE) I PLC
SOUTHERN WATER SERVICES LIMITED
CORPORATE UPDATE: COMPLETION OF EQUITY RAISE
-- Funds managed by Macquarie Asset Management have completed
their investment of an additional GBP550 million into the Southern
Water Group
Injection of additional GBP550 million of equity capital
On 11 August 2023, SW (Finance) I plc (the " Company ")
announced that, to maintain the momentum of its Turnaround Plan [1]
, shareholders of Southern Water Services Limited (" Southern Water
") and its holding companies (the " Southern Water Group ") had
agreed (subject to satisfaction of market standard conditions) to
provide an additional GBP550 million of equity funding (the "
Equity Amount ") for the Southern Water Group.
The Company announces that the Equity Amount has today been
provided by funds managed by Macquarie Asset Management ("
Macquarie ") to the Southern Water Group, of which GBP375 million
has been invested as equity into Southern Water with the remaining
GBP175 million invested into its holding companies.
Under the Turnaround Plan, Southern Water will increase capital
investment in its network to GBP3 billion during this regulatory
period (2020-25), equivalent to investing GBP1,500 per household
and representing a 50 per cent increase to the capital investment
commitment made upon Macquarie's initial investment in late
2021.
Southern Water's new executive team is continuing to deliver on
the Turnaround Plan, which is focused on ensuring a reliable supply
of water for customers; protecting and improving the health of
rivers and seas by building capacity and resilience of our
waste-water treatment works and sewer network; making customer
service easy and trusted; and becoming an industry-leader in health
and safety.
The company is making good progress on the Turnaround Plan:
o Achieved a two-star Environmental Performance Assessment
Rating by the Environment Agency for 2022 (compared to a one-star
rating in 2021);
o Completed the roll-out of c. 24,000 sensors, providing
real-time monitoring of its sewer network;
o Fitted Event Duration Monitors on c. 99 per cent of its storm
overflows. Southern Water is on-track to be at 100 per cent in the
coming months, further enhancing its already industry-leading
transparency;
o Continued to improve the operational performance and
compliance of its pumping stations and treatment works ;
o Maintained water leakage at 17%, compared to the UK industry
average of 23%. Part of the Equity Amount is to fund replacement of
legacy water mains pipes. Under its business plan submission to
Ofwat for the 2025-30 regulatory period, Southern Water has
proposed a further step-change in mains replacement, with an
associated aim to further reduce water leakage to 13% by 2030;
o Increased the discount on its social tariff to 45 per cent,
reducing the average combined household bill from GBP439 to GBP241
for 121,000 vulnerable customers. In a challenging cost-of-living
environment, clean drinking water and waste-water treatment
services for these vulnerable households has been reduced to 66
pence per day.
Lawrence Gosden, CEO, said:
"We would like to thank Macquarie for its continued support
which will enable us to significantly increase capital investment
in our network during this regulatory period, manage the impact of
cost inflation and higher funding costs on our business, whilst
maintaining the momentum of the Turnaround Plan I announced in
April 2023.
"The Turnaround Plan will deliver a short, sharp, ambitious
performance improvement by 2025. It will also set Southern Water up
for the step-change in capital investment planned in the next
regulatory period (2025-30). We recently submitted a GBP7.8 billion
investment proposal to our regulator, which includes a record
GBP2.9 billion of investment in the environment.
"As well as protecting the environment, reducing pollution
incidents and delivering a detailed plan to reduce the use of storm
overflows, this will see Southern Water continue to focus on the
critical issues of drought and water scarcity, cutting the amount
of water taken from rivers, building new longer-term water sources
and helping customers and natural habitats better capture
rainwater."
For further information, please contact Stuart Ledger (Group
CFO) at:
Address: Southern House, Yeoman Road, Worthing, BN13 3NX, United Kingdom
Tel: 01903 272 056
Email: stuart.ledger@southernwater.co.uk
DISCLAIMER - INTENDED ADDRESSEES
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this announcement constitutes an offer of securities for sale in
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END
[1]
https://www.southernwater.co.uk/media/8235/6579_ofwat_company_turnaround_plan.pdf
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