Macquarie to Inject £245 Million More Into UK’s Southern Water
(Bloomberg) -- Macquarie Asset Management committed to putting a further £245 million ($330 million) of equity into Southern Water Ltd. as part of a plan to strengthen the finances of the UK utility.
Macquarie, which holds a majority stake in the consortium controlling Southern, previously said it would pump more money into the company, indicating £245 million would be the minimum. The fresh injection adds to the £655 million it stumped up earlier this year to shore up the firm’s balance sheet and protect its credit rating.
Macquarie also reconfirmed that it would “provide up to £300 million of additional equity commitments” during the first half of 2026, according to a statement from Southern Water.
Britain’s water industry has been in crisis, with a combination of structural and financial problems resulting in chronic leaks and sewage spills, rising bills and a widespread loss of public trust. That’s driven up the risks of investing in the sector, which desperately needs funds to upgrade crumbling infrastructure.
The latest equity commitment is the final piece of a deal between Macquarie, Southern and its creditors that’s been in the making for almost a year. The utility had to bolster its capital to avoid another downgrade to junk, which would have put it in breach of the conditions attached to its operating license.
During the summer, creditors Ares Management Corp. and Westbourne Capital agreed to write off a substantial portion of Southern’s debt at the holding-company level in exchange for a minority stake. Holders of the debt sitting at the so-called midco level — which lies in between the operating and the holding companies — consented to extend maturities to at least September 2030.
Following the deal, which was implemented during the past few months, Southern has succeeded in tapping capital markets, selling £675 million of new bonds in November.
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