Macquarie Group’s asset management arm on Monday agreed to buy a majority stake in Southern Water for more than 1 billion pounds ($1.39 billion), pledging to transform the British utility that has faced criticism and fines for polluting local rivers.
The investment comes a month after Britain handed Southern Water a record fine of 90 million pounds after it pleaded guilty to illegal discharges of sewage that polluted rivers and coastal waters in southern England.
Southern Water provides services to 2.6 million water customers and 4.7 million wastewater customers across southern England in Sussex, Kent, Hampshire and the Isle of Wight.
The Australian fund said 2 billion pounds would be invested over the next four years of the current regulatory period to fix the pipes, pumping stations, and sewers that are underperforming and causing harm to the local environment.
“We acknowledge the business’ transformation will take time and that is why we intend to own our stake in Southern Water over multiple regulatory periods,” said Leigh Harrison, Head of Macquarie Infrastructure and Real Assets.
Macquarie Asset Management has $427 billion in assets under management spread across Australia, the Americas, Europe, and Asia.
The fund, which has consulted with the British water regulator, said it has made several commitments to Southern Water including improving the water company’s environmental track record, reducing leaks, and ensuring affordable customer bills.
Source: Reuters.com