Capital Reorganisation

Severn Trent PLC
9 August 2000


In 1997, the Company undertook a restructuring of its share capital, a part of
which was the creation of its B shares.  Subsequently the Company made two
offers to shareholders to repurchase the B shares and stated its intention, at
a future date, though not before the 2000 AGM, to reduce its share capital by
repaying the nominal value of the B shares and cancelling those shares.

There are currently 23,845,584 B shares in issue representing £9,061,322 out
of a total issued share capital of £232,552,924.  

The Company now intends to reduce its authorised share capital from
£475,000,000 to £339,483,121 67/95 by cancelling and extinguishing all of the
issued and unissued B shares and returning the nominal value paid up or
credited as paid up on the issued B shares so cancelled to the holders of the
B shares together with any preferential dividend outstanding when the
reduction of capital is completed.

 
A resolution to this effect was passed at the Company's Annual General Meeting
on 1 August 2000 but is subject to the confirmation of the Courts.

A further announcement will be made in due course following the referral of
this proposal to the Courts.