Pennon, the London-listed owner of South West Water, has launched a cash call to investors for £550m. This move is part of a larger £1bn investment aimed at improving outcomes for customers and communities.
The announcement comes days after South West Water received a record £7.9m fine for hundreds of sewage spills. Pennon also stated it would reduce its shareholder dividend by approximately 30% as part of an "operational reset."
Shares in Pennon, which also owns Bristol Water and SES Water, fell by as much as 22% following the news. The company's new chief executive, Keith Haslett, indicated that investment is necessary for improvements and that these plans would not be funded by further increases to customer bills.
Last month, South West Water was issued the largest fine for environmental offences in the region, nearly £8m, which will be paid by shareholders. In June, the company was fined £1.85m in a separate case after a 2024 parasite outbreak in Brixham, Devon.
South West Water customers are already experiencing bill increases to support £2.5bn of infrastructure investment planned until 2030. The company has also applied for a ban on non-essential water use for some businesses in parts of Devon and west Dorset due to a lack of rainfall.