Macquarie has poured another half-a-billion pounds into struggling Southern Water, taking its stake in the group to over 75 per cent.
The Australian asset manager injected £550m into the utilities group – which takes the total amount of the bailout to £1.65billion following a similar cash infusion two years ago.
That investment prevented the industry regulator Ofwat from placing the water group into administration.
The rescue comes amid a financial crisis in the water industry. Several of the UK’s privatised regional monopolies are finding themselves strapped for cash after loading up on debt and paying out bumper dividends to investors.
Southern Water supplies areas including Hampshire, Sussex, Kent and the Isle of Wight.
Cash injection: Macquarie has poured another half-a-billion pounds into struggling Southern Water
It is sitting on a £5.2billion debt pile that was recently downgraded – making it more expensive for the firm to borrow, while also banning it from paying dividends to shareholders.
The company said that of the £550m cash infusion, around £375m would be used to ‘support additional investment aimed at protecting the environment and better serving our customers’.
Southern Water is one of the poorest performing water firms in Britain and has been repeatedly criticised for its record on pollution. It was found to have dumped sewage in areas ranging from oyster beds near Whitstable in Kent to sailing waters off Hampshire.
Macquarie has previously been blamed for a similar crisis at rival utility group, Thames Water, in which it was formerly the largest shareholder.
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