Northumbrian Water returns to the London Stock Market after eight years

Northumbrian Water is the first privatised company to return to the London Stock Market. The company floated on the AIM (Alternative Investment Market) on 23 May, with a consortium of 25 Institutional Investors agreeing to take 75% of the share capital for £2.2 billion. Suez Ondeo has retained a 25% holding in the business, leaving it the largest shareholder.

The company intends to seek a listing on the main market of the London Stock Exchange as soon as it is reasonably practicable.

OWAT is in favour of the listing, as it believes that this encourages greater efforts to improve efficiency.

A brief note on the Northumbrian Water Group

Northumbrian Water Group plc (formerly Aquavit plc) was incorporated on 12th May 2003 as an acquisition vehicle to acquire the entire issued ordinary share capital of Atlantic Water Limited, which is the holding company of the Ondeo Services UK Group (OSUK). OSUK, a leading UK water and sewerage business, owns both regulated and non-regulated operations in the water and sewerage sector in the UK together with other non-regulated businesses. Northumbrian Water Limited is OSUK's principal subsidiary and is regulated by OFWAT.

In June, OFWAT launched a consultation exercise into the acquisition of Northumbrian Water. It is currently inviting views on any regulatory issue arising from the acquisition, including the:

1. Ability of Northumbrian Water to finance its function as a water and sewerage company, including its current and future capital investment programmes;
2. Fitness of Northumbrian Water Group to be the owner of a regulated water business;
3. Current ring-fencing arrangements to protect the regulated business from associated activities of other group companies; and
4. Need for any changes in Northumbrian Water's licence to protect customer's interests.

Responses are to be made by 1st July 2003.

For further information, please contact Richard Temple at [email protected] or on + 44 (0) 20 7367 3738.