Pennon targets £490m fundraise for infrastructure investment
Pennon targets £490m fundraise for infrastructure investment
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Pennon Group has unveiled plans for a major rights issue to help finance £3.2billion of water infrastructure investment over the coming five years. The FTSE 250 firm, which owns Bristol Water and South West Water, intends to raise around £490million by issuing nearly 186 million shares at 264p each.
This offer represents a 35.2 per cent discount to the theoretical ex-rights price, which was calculated using Pennon's closing price of 500.8p on Tuesday and is adjusted for last year's interim dividend of 14.7 pence per share. Pennon said the funding will ensure it has a 'sustainable balance sheet' during the regulatory period from March 2025 to April 2030.
Over that time, the company plans to spend a record £3.2billion across Surrey and South West England on improving water infrastructure and reaching net zero across its operations. It plans to invest in large reservoirs, such as Cheddar 2 in Bristol, upgrade a third of water treatment works in Devon and Cornwall, and cut leakages on its networks to under 10 per cent and less than 4 per cent on customer properties.
Funding: Pennon Group has unveiled plans for a major rights issue to help finance £3.2billion of investment in the coming five years. By 2030, Pennon has also promised to plant 300,000 trees and stop storm overflows at bathing and shellfish waters. However, the Exeter-based firm has also said it would hike customers' water services bills by £4 per month and for sewerage services by £5 per month.
