Macquarie Group Ltd, Australia’s biggest investment bank agreed to buy a majority stake in Southern Water for more than 1 billion pounds. Macquarie pledged to transform the British utility that has faced a heavy backlash for polluting local rivers.
Southern Water had to pay a whopping 90 million pounds fine after the company admitted to illegally dumping tons of sewage into rivers and coastal waters in southern England. The company admitted dumping 6,971 illegal spills from 17 sites in Hampshire, Kent, and West Sussex. A judge ruled that Southern Water deliberately chose to dump billions of liters of raw sewage into seas and rivers to save money between 2010 and 2015. As a result of the regulatory failings of the water company, a criminal case caused a £126m penalty to be imposed on it in 2019.
The water company provides its services to nearly 4.7 million wastewater customers and 2.6 million water customers across southern England in Kent, Hampshire, the Isle of Wight, and Sussex.
Macquarie said that over the next four years of the current regulatory period, 2 billion pounds will be used to upgrade the infrastructure- fix the pumping stations, sewers, and pipes that are not performing optimally and are causing immense harm to the local environment.
The Australian fund consulted with the British water regulator and said that it is committed to improving the environmental track record of Southern Water, and ensuring affordable customer bills.
Macquarie said it would work towards strengthening “a zero-tolerance mindset to environmental pollution” and help improve the track record of Southern Water, which at the moment is “one of the worst performings in the UK water sector”. Macquarie Group said that the failings of Southern Water company in the past had been “unacceptable” and pledged to reduce pollution.
The Australian investment group acting on behalf of investors, insurance companies, and pension funds acquired a majority stake in the parent company Greensands Holdings for more than £1bn. Macquarie has nearly $427 billion in assets across the Americas, Europe, Asia, and Australia, under its management.