Severn Trent to raise £250m to fund green projects
Severn Trent announced this morning that it would seek to raise £250m through a share placing in order to fund six new green projects.
The water firm said that the shares, are expected to represent up to 5 per cent of its existing share capital, would be priced at 9717/19 p each.
The proceeds will be used for a number of environmental projects that have been endorsed by sector watchdog Ofwat.
Among these, Severn Trent is planning to decarbonise the water supply in the Midlands, improve flood resilience across the region and provide customers with smart meters.
The announcement came as the FTSE 100 firm said that profit had slipped 17 per cent in 202o due to a fall in water use due to the pandemic.
Profit fell to £471m, down from £568m the prior year. It said that the various Covid-19 lockdowns had cost it £50m, but that it would be able to reclaim these funds later.
It also said that it had been awarded a £79m bonus by the regulator due to delivering on its customer pledges.
Chief executive Liv Garfield said: “The last year has thrown up multiple challenges for us but it’s clear everyone at Severn Trent has responded superbly to the new normal we find ourselves in.
“Our industry-leading customer ODI performance shows just how much we’ve been able to improve our services, often while working in very difficult circumstances.
“We took a very early decision to be at the forefront of efforts to help our region bounce back. That is why it was such good news that we’d been successful with our Green Economic Recovery proposal, meaning we can invest even more in sustainable projects and help create thousands of jobs.”