UK's Pennon launches £550 million rights issue, cuts dividend to fund investment
UK's Pennon launches £550 million rights issue, cuts dividend to fund investment Oct 7 (Reuters) - British water utility Pennon Group PNN.L launched a fully underwritten £550 million ($728.5 million) rights issue and lowered its dividend in a bid to fix operational problems at its regulated water business.
Here are some details:
The owner of South West Water and SES Water said the capital raise would help fund roughly £1 billion of additional investment, part of a wider operational reset led by new Chief Executive Keith Haslett
Capital investment in regulated water business over the eighth asset management period of five years to March 2030 is now expected to reach about £3.6 billion, around £1 billion more than originally planned
The company is considering the sale of Pennon Power, its renewables investment arm, to focus on its core water business and to reduce debt, which stood at £4.51 billion at the end of March
Pennon also reduced its total dividend for financial year 2026/27 to about £125 million from £138 million in 2025/26, implying an about 30% cut in dividend per share
The update comes after British Prime Minister Andy Burnham said in September he would legislate to repeal a ban on the public ownership of water companies
Britain's water industry has come under intense scrutiny for environmental breaches, high dividend payouts and rising customer bills
($1 = 0.7550 pounds)
(Reporting by Nithyashree R B in Bengaluru; Editing by Mrigank Dhaniwala)