Pennon has unveiled plans for a £550m investor cash-call as part of an overhaul just weeks after its South West Water supplier was fined a record £7.9m for repeated sewage spills.
Rights issue to support extra £1bn investment
Recently-hired chief executive Keith Haslett said the rights issue would help support plans for around an extra £1bn of investment as it looks to “deliver better outcomes for our customers and communities”.
London-listed Pennon, which also owns Bristol Water and SES Water, said this will come on top of about £2.6bn of investment already earmarked under its agreed plans with regulator Ofwat.
Record fine for environmental offences
It follows last month’s record-breaking fine handed down at Plymouth Magistrates’ Court for 18 charges of environmental offences relating to pollution incidents in Devon and Cornwall over a six-year period.
Mr Haslett, who took on the role in April, said: “It’s clear from my comprehensive review that Pennon has real strengths, but there are areas where we need to improve and deliver better outcomes for our customers and communities.”
He added: “The operational plan, which is already under way, is practical and focuses on clearer accountability with key skills brought back in-house, and more investment where our assets need it most.”
Drought restrictions in Devon
He insisted the plan would “deliver a better service for customers, improve our environmental performance and generate sustainable, growing value for our shareholders”.
The news comes a day after South West Water said it was seeking to extend a ban on non-essential water use for businesses across parts of Devon as the region looks set to stay in drought conditions until next spring.
Five heatwaves were recorded throughout the summer months, and South West Water introduced a hosepipe ban on August 8. This continues to be in place as the water company seeks to widen restrictions to certain businesses.
