June 28th 2012
French Utility, Veolia Environment SA has today sold its three UK regulated water businesses for £1.2bn ($1.92bn; €1.5bn) in an attempt to cut its debts. Rift Acquisitions, a fund managed by Morgan Stanley and Prudential’s MG, will buy a 90% stake of Veolia Water’s central, southeast and east businesses.
Veolia Water serves more than 3.5 million people in southern England and has a combined annual turnover of 274 million pounds.
Veolia Environment will retain a 10% stake in Veolia Water along with its Veolia Water Outsourcing business which provides services to other UK water providers. The proceeds of the sale will go towards paying down the €15bn of net debt owed by the group’s French parent company.
CEO Antoine Ferret said he plans to reduce Veolia’s debt by 3 billion euros by the end of next year in an attempt make the company more profitable. Last month Ferret said, he wants to focus on “promising” countries and will pursue asset sales in the U.S. and the U.K.
“This first significant divestment shows that we are moving in the right direction regarding the implementation of our strategic plan,” “The transformation of Veolia is progressing at a good pace.” Ferret said in a statement.