Pennon launches £550m rights issue, slashes dividend as new CEO overhauls utility
British water utility Pennon launched a £550 million ($729 million) rights issue and slashed its dividend on Wednesday as part of new CEO Keith Haslett's plans to fund a major overhaul, sending shares in the company sinking to a 15-year low. The rights issue at a price of 250 pence per share represents a discount of 35.5% to the theoretical ex-rights price, Pennon said.
5% discount to TERP Pennon also plans 30% dividend cut, sale of Pennon Power Shares drop more than 20% to 15-year low (Adds analyst quote in paragraphs 9 and 10, shares in paragraph 5, context throughout) Oct 7 (Reuters) — Pennon launched a £550 million ($729 million) rights issue and slashed its dividend on Wednesday as part of new CEO Keith Haslett's plans to fund a major overhaul, sending shares in the British water utility sinking to a 15-year low. 51 billion debt pile. Britain's water industry has been under intense scrutiny for environmental breaches, high dividend payouts and rising customer bills.
Prime Minister Andy Burnham said last month he would legislate to repeal a ban on the public ownership of water companies to deal with the crisis in the sector. 6 billion for the current regulatory period. 8 pence by 1037 GMT, the lowest since August 2011. The stock was also on track to log its steepest one-day drop since 1999.
5% to the theoretical ex-rights price, Pennon said. The size of the offering came in higher than many analysts expected. Pennon also reduced its total dividend for fiscal year ending March 2027 to about £125 million from £138 million in fiscal 2026, implying a cut of about 30% in dividend per share. "(The) successful delivery still depends on execution of the operational turnaround and regulatory approval for additional capex," Jefferies analyst Ahmed Farman said in a note.
Morgan analysts said, adding that investors may demand a higher yield. com)