Proactive Investors - Severn Trent PLC (LON:SVT) moved to bolster its finances, unveiling a £1 billion fund raise which includes a £500 million investment from Qatar Investment Authority and a £500 million placing.
The news came as the water company unveiled plans to invest £12.9 billion between 2025-2030 as part of its business plan for the regulatory period beginning 1 April 2025 and ending 31 March 2030 as it seeks to cut leakages and sewage spills.
Severn Trent said the plan includes £12.9 billion of total expenditure across its network, including £5.0 billion of investment focused on enhancing capacity and service beyond current levels, almost all of which is focused on the environment.
It said it would ensure Severn Trent Water is responsibly funded from the outset, with average gearing of 65.2% expected as it continues to target investment grade credit rating of BBB+/Baa1.
Under the plan and calculated at 2022/23 prices, the average annual household bill will be £518 by 2029/30 (2024/25: £379), an average monthly increase of £2.32 over the five-year period.
It said measures would include a 16% reduction in leakage and a 30% reduction in spills from storm overflows.
The water company said it has made a good start to the financial year though the expected reduction in finance costs will be less than previously guided as a result.
Capital investment is expected towards the top end of the guidance range, at around £1 billion, it said.
The business plan is expected to create up to 7,000 jobs directly and will be submitted to Ofwat in October.
Alongside the placing, a retail offer of €8 million will also take place.