18th Mar 2020 15:22
(Alliance News) - Water utility Pennon Group PLC on Wednesday said it will sell its recycling and residual waste business Viridor Ltd to US-based private equity Kohlberg Kravis Roberts & Co LP for an enterprise value of GBP4.2 billion.
Shares in Pennon were up 1.4% at 1,101.50 pence each on Wednesday afternoon in London.
Pennon, which will receive GBP3.7 billion net proceeds from the sale, said the divestment is part of a strategic review.
The FTSE 250-listed company plans to use the sale proceeds to reduce borrowings and make a return to shareholders, whilst retaining some funds.
Chris Loughlin, chief executive, said: "The transaction is great news for shareholders as it recognises the strategic value that Pennon has developed and nurtured in Viridor over many years and accelerates the realisation of that value for shareholders.
"On completion of the transaction, Pennon will continue to focus on its sector-leading water and wastewater businesses and will consider further growth opportunities that create value for customers, employees and shareholders".
Pennon also said its dividend policy of 4% growth above retail price index inflation will remain unchanged for financial 2020 and a new dividend policy for the 2020 to 25 period will be announced at the full-year results on June 4.
By Tapan Panchal; [email protected]
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