Aug 9, 2021

Australia’s Macquarie buys £1bn majority stake in Southern Water

Australian infrastructure bank Macquarie has taken a majority stake in Southern Water for more than £1bn, just weeks after the UK water company was fined a record £90m for deliberately dumping billions of litres of raw sewage in rivers and the sea. Macquarie is one of the world's biggest infrastructure investors, with stakes in Cadent, the gas distribution network, and KCOM, a fibre telecoms business in the UK. It was the largest investor in Thames Water, Britain's biggest water company, between 2006 and 2017 and was widely criticised for extracting millions of pounds in dividends as the utility struggled with leakages and pollution failures. Leigh Harrison, head of Macquarie Infrastructure and Real Assets, said: "Southern Water needs significant investment to improve its operational and environmental performance and financial health. Without it, the business will be unable to fulfil the expectations." "A £1bn equity investment in Southern Water and its group strengthens our balance sheet to enable Southern Water to increase investment in our network and accelerate the transformation plans we have put in place." UK regulator Ofwat said it welcomed the deal: "The new investor recognises that the current performance of Southern Water for its customers and the environment is not good enough and has committed to a substantial package of investment."

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