UU linked with £500m asset sale

UNITED Utilities could fetch as much as £500m from the sale of its outsourced service business, according to reports.

The Warrington company – which said lat last month it was looking at more asset disposals having sold its stake in Northern Gas Networks and in a business in the Philippines.

The company has reportedly hired investment bank JP Morgan Cazenove to run the sale process, which has already seen private equity firms such as 3i and KKR linked with a bid.

UU, which  which provides water and sewerage services to seven million people in this region, also operates utility services for other companies such as Welsh Water.

With water regulator OFWAT ordering UU and its peers to cut bills to consumers, utility firms have to raise money to fund improvements to the infrastructure.

Chief executive Philip Green is thought to favour asset sales over a rights issue or a cut in the dividend.

UU declined to comment on the reports, while shares rose 4.7p to 499p.