Pennon’s chief executive said the cash would be used to ‘deliver better results’
Pennon has revealed plans for a £550m cash-call from investors as part of an overhaul just weeks after supplier South West Water was fined a record £7.9m for repeated sewage spills.
Newly hired chief executive Keith Haslett said the rights issue would help support plans for around £1bn of investment as it looks to “deliver better outcomes for customers and communities”.
London-listed Pennon, which also owns Bristol Water and SES Water, said this would be on top of the £2.6bn investment it had set out under plans agreed with regulator Ofwat.
It follows the latest record-breaking fine handed down at Plymouth Magistrates’ Court for 18 charges of environmental offenses relating to pollution incidents in Devon and Cornwall over a six-year period.
Mr Haslett, who took up the role in April, said: “It is clear from the comprehensive review that Pennon has real strengths, but there are areas where we need to improve and deliver better results for our customers and our community.”
He added: “The operational plan, which has been implemented, is practical and focused on clearer accountability with key skills brought back home, and more investment where our assets are most needed.”
He stressed that the plan would “provide better service to customers, improve environmental performance and generate sustained and growing value for shareholders”.
The news comes a day after South West Water said it was seeking to ban non-essential water use by businesses in parts of Devon as the region looks set to remain in drought conditions until next spring.
Five heatwaves were recorded in the summer, and South West Water introduced a hosepipe ban on 8 August. This continues as water companies seek to expand restrictions on certain businesses.