Sale of Water Purification business

RNS Number : 9834M

Severn Trent PLC

13 May 2015

 

13 May 2015     

Severn Trent Plc - sale of Water Purification business

Severn Trent Plc is pleased to announce that it has entered into a binding agreement to sell its Water Purification business to its joint venture partner Industrie De Nora. The transaction values the total enterprise at US$ 99 million (£61.9 million¹). The group's share of US$ 81.2 million (£50.8 million¹) will be settled through a cash payment of US$ 20.1 million (£12.6 million¹) and the balance through the settlement of net intercompany debt. The sale is expected to complete on or around 30 June 2015.

The Water Purification business had gross assets of £103.6 million as at 30 September 2014, and reported a loss in FY2013/14 of £39.2 million (before interest and tax but after a goodwill impairment charge of £24.6 million). The business will be reported as a discontinued operation in Severn Trent Plc's Preliminary Results announcement on 22 May.

The Water Purification business provides disinfection and filtration technology solutions for the Global Onshore and Offshore Energy, Marine and Municipal markets.

Proceeds from the transaction will be used for general corporate purposes.

Industrie De Nora is a privately owned group and is headquartered in Milan, Italy. It is a long-standing strategic partner in the Water Purification business through the Severn Trent De Nora Joint Venture which has been in place since 2002.

As disclosed at the capital markets day on 17 March, Severn Trent has reorganised and brought together its remaining non-regulated businesses - Operating Services US, Operating Services UK, including non-household retail, and renewable energy - into a new "Business Services" division. The sale of the Water Purification business will allow the management team to focus on creating value from these core activities.

EY Corporate Finance acted as sole financial adviser to Severn Trent, in respect of this divestment.

1.     Assumed exchange rate USD:GBP 0.625 at completion

Enquiries:

John Crosse	Severn Trent Plc	0207 353 4200 (on the day)
Head of Investor Relations		02477 715000
Chris Hughes / Camilla Cunningham	Tulchan Communications	0207 353 4200

Cautionary statement regarding Forward Looking Statements

This document contains statements that are, or may be deemed to be, 'forward-looking statements' with respect to Severn Trent's financial condition, results of operations and business and certain of Severn Trent's plans and objectives with respect to these items.

Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as 'anticipates', 'aims', 'due', 'could', 'may', 'will', 'would', 'should', 'expects', 'believes', 'intends', 'plans', 'projects', 'potential', 'reasonably possible', 'targets', 'goal' or 'estimates' and, in each case, their negative or other variations or comparable terminology. Any forward-looking statements in this document are based on Severn Trent's current expectations and, by their very nature, forward-looking statements are inherently unpredictable, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future.

Forward-looking statements are not guarantees of future performance and no assurances can be given that the forward-looking statements in this document will be realised. There are a number of factors, many of which are beyond Severn Trent's control that could cause actual results, performance and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to: the Principal Risks disclosed in our latest Annual Report (which have not been updated since); changes in the economies and markets in which the group operates; changes in the regulatory and competition frameworks in which the group operates; the impact of legal or other proceedings against or which affect the group; and changes in interest and exchange rates.

All written or verbal forward-looking statements, made in this document or made subsequently, which are attributable to Severn Trent or any other member of the group or persons acting on their behalf are expressly qualified in their entirety by the factors referred to above. Subject to compliance with applicable laws and regulations, Severn Trent does not intend to update these forward-looking statements and does not undertake any obligation to do so,

Nothing in this document should be regarded as a profits forecast.

This document is not an offer to sell, exchange or transfer any securities of Severn Trent Plc or any of its subsidiaries and is not soliciting an offer to purchase, exchange or transfer such securities in any jurisdiction. Securities may not be offered, sold or transferred in the United States absent registration or an applicable exemption from the registration requirements of the US Securities Act of 1933 (as amended).

 

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