Bumper pay: Boss Liv Garfield took home £3.2m for the 2022-23 financial year
Severn Trent will tap shareholders for £1billion – including £500m from Qatar – to help tackle sewage pollution.
The utility group announced a share placing yesterday, with the Qatar Investment Authority lined up to provide half the funds, as the company responds to pressure to clean up its operations.
Qatar’s sovereign wealth fund is already the water company’s third biggest shareholder after investment giants BlackRock and Lazard Asset Management.
Severn Trent will raise another £500m from institutional investors, £7m from retail investors and several unspecified company directors will buy shares worth £275,000 each.
London-listed Severn Trent is one of the UK’s biggest water suppliers, serving 4.6m households and businesses across the Midlands and into Wales. Its service area stretches from the Bristol Channel to the Humber, and from mid-Wales to the East Midlands. The cash will be funnelled towards a £12.9billion transformation plan to prevent sewage overflow after storms and to plug leaks.
Industry regulator Ofwat last month criticised the poor performance of UK water companies and ordered the worst offenders, which did not include Severn Trent, to return £144m to customers.
Severn Trent was forced to pay a £1.5m fine in 2021 for illegal sewage dumping after the Environment Agency took it to court. It was fined £800,000 in the previous year for discharging £3.8m litres of raw sewage into a stream between 2014 and 2016.
The company is aiming to reduce leaks by 16 per cent and spills from storm overflows, which result in raw sewage flooding into rivers, by 30 per cent as part of its five-year plan from 2025.
Water suppliers have also faced criticism for hiking bills and paying out huge sums to bosses and investors while pollution incidents remain high. Severn Trent chief executive Liv Garfield took home £3.2m for the 2022-23 financial year and the company paid out £261m in dividends.
Bills for customers will soar by 37 per cent by the end of the decade, rising from £379 in 2025 to £518 by 2030, it revealed yesterday. It said it will ringfence £550m of the multi-billion-pound investment package to help customers who are struggling to pay their bills.
Garfield said: ‘By 2030 we will have transformed our network to provide our customers with the very best service.’
The full details of the transformation proposals will be published on Monday when the other major UK water firms will also reveal their business plans for 2025 to 2030.
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