Pennon Group PLC (LSE:PNN, OTC:PEGRY) has announced a fundraising round to shore up its balance sheet following the acquisition of Sutton and East Surrey (SES) Water on Wednesday.
New funds of £180 million are being sought following the acquisition of SES Water’s holding company Sumisho Osaka Gas Water UK Ltd, Pennon announced, with an offer having been made through platform PrimaryBid to allow retail investors to take part.
PrimaryBid made a conditional offer to purchase new ordinary shares, Pennon said, with the ultimate placing price yet to be determined.
Pennon explained the funding was being sought as part of a bid to maintain the company’s debt gearing in the range of 55% to 65%.
Some £89 million was paid to previous SES-owner Sumitomo Corporation and Osaka Gas for the firm, with the total enterprise value sitting at £380 million.
“SES Water is a fantastic fit for Pennon as we further expand our presence in water supply across southern England,” chief executive Susan Davy commented.
“We are able to invest in SES Water's resources, infrastructure, environment and people thanks to our strong financial performance and long-term UK shareholder base.”
The share placing was carried out on a non-pre-emptive basis, with a bookbuild process starting after the unveiling of the acquisition on Wednesday morning.
Directors previously committed £150,000 to the equity raise, Pennon added.