Severn Trent flogs its North American business for £48m to focus on the UK

 
Courtney Goldsmith
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Severn Trent sends its US business down the drain (Source: Getty)

Severn Trent today announced it will sell its North American business in order to focus on its core UK market.

The business, which operates and manages water and wastewater systems, was sold for $62m (£48m) to US investors PPC Enterprises and Alston Capital Partners.

Severn Trent said it will use the proceeds for general corporate purposes.

Read more: Severn Trent makes a splash with dividend hike after eyeing more savings

"The North American division is a strong business that will be better able to grow and flourish under a new USA-based owner. Its sale enables the Severn Trent Group to focus on its core strategic activities," said Liv Garfield, chief executive at Severn Trent.

The FTSE 100 utility's stock fell around 1.5 per cent at the market open, but in afternoon trading shares were down just 0.05 per cent to 2,181p.

Britain's biggest listed water firm said it will provide a restatement of prior-year results taking account of the divestment in its first quarter trading update on 19 July, and the US business will be reported as a discontinued operation in the utility's half-year results on 23 November.

In May, Severn Trent announced a raft of positive results including a rise in full-year underlying profit to £525m as it boosted service.

Read more: Severn Trent boss Olivia Garfield soaks up £2.45m pay package

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