News

Pennon Group to Raise £180 Million for Sutton and East Surrey Water Purchase

James L. Flint

• January 10, 2024

Pennon Group has announced that it plans to raise approximately £180 million through a discounted share placing, a subscription, and a retain offer on the PrimaryBid platform. The funds raised will be used to finance the acquisition of Sutton and East Surrey Water.

In this latest development, Pennon Group intends to place 23.7 million new ordinary shares with both existing and new institutional investors. The placing price of the shares is set at 730 pence each, representing a discount of around 2.6% compared to the closing price on Tuesday.

Earlier today, Pennon Group completed the purchase of Sutton and East Surrey Water and certain ancillary businesses from Sumitomo Corp. and Osaka Gas for a total of £89 million. While the acquisition was initially planned to be funded with existing cash and financial resources, the proceeds from the share placing will now be utilized to ensure that the enlarged group remains within its water business gearing range of 55%-65%.

Currently, Pennon Group shares are trading at 756 pence, demonstrating a 0.9% increase of 6.50 pence.