Severn Trent completes £50m sale of Italian joint venture

MIDLANDS utility Severn Trent has completed the £50m sale of its joint venture water purification business.

The Coventry company has sold the business to its JV partner Industrie De Nora. Confirmation came in a brief statement to the London Stock Exchange.

The transaction, announced in May, valued the total enterprise at £61.9m. Severn Trent’s share will be settled through a cash payment of £12.6m and the balance through the settlement of net inter-company debt.

The water purification business had gross assets of £103.6m, as at September 30, 2014, and reported a loss in FY2013/14 of £39.2m (before interest and tax but after a goodwill impairment charge of £24.6m).

The business provides disinfection and filtration technology solutions for the global onshore and offshore energy, marine and municipal markets.
 
Industrie De Nora is a privately owned group and is headquartered in Milan. 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.
 
Severn Trent has said proceeds from the transaction will be used for general corporate purposes.
 
The company 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.
 
It said the sale of the water purification business would allow the management team to focus on creating value from these core activities.
 
EY Corporate Finance acted as financial adviser to Severn Trent on the deal.