8th Jul 2020 17:10
(Alliance News) -Â Pennon Group PLC on Wednesday said it has completed the GBP4.2 billion sale of Viridor to funds advised by Kohlberg Kravis Roberts & Co LP.
The firm added that Chief Executive Chris Loughlin and Chair John Parker will not seek re-election at July's annual general meeting.
"Given the sale of Viridor and the start of the new five-year regulatory cycle, it is the appropriate time to step down as the group chief executive of Pennon," said Loughlin.
Gill Rider will take over as chair, having joined the Pennon board in 2012, and Susan Davy will become CEO. Davy was appointed as chief financial officer in 2015, having joined the group as finance director of South West Water in 2007.
Turning back to the Viridor sale and, as anticipated, the cash proceeds received by Pennon were GBP3.7 billion, after taking into account debt and debt-like items that remained with Viridor and customary transaction costs.
"With the disposal of Viridor, significant strategic value has been realised and Pennon will now focus on its sector leading water and wastewater businesses, whilst considering further growth opportunities that create value for customers, employees and shareholders," the London-listed water firm said.
Pennon will consider the best use of the proceeds in terms of reducing borrowings and pension obligations. It will also review the "most efficient and effective method of returning value to shareholders", alongside considering market opportunities.
"Any use of capital to pursue an investment opportunity will be compared with the alternative of returning that capital to shareholders, maintaining our strong focus on financial discipline. We aim to update shareholders on this review at Pennon's half year results announcement in November 2020," Pennon said.
Shares in Pennon closed up 0.8% at 1,076.50 pence in London on Wednesday.
By Lucy Heming;Â [email protected]
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