South West Water owner Pennon taps investors for £550m just days after record sewage fine

From the Newshound archive · first published 7 October 2026 · last updated 8 October 2026.

Pennon Group's shares dropped 22% to their lowest level in 15 years on Wednesday after the South West Water parent launched a £550m rights issue and trimmed its dividend by around 30%, weeks after a judge labelled the company 'reckless' and imposed a £7.9m fine — the largest on record — for hundreds of sewage spills between 2015 and 2021. Chief executive Keith Haslett, appointed in April, said a thorough review had uncovered shortcomings in both customer service and environmental performance, and committed to an additional £1bn of investment beyond the £2.6bn already pledged under Ofwat plans. The fine, covering 18 charges of pollution at sites including Harlyn beach in north Cornwall and the otter-rich River Camel, will be absorbed by shareholder returns rather than passed on through higher bills.

Pennon also plans to sell its renewable energy arm, Pennon Power, to help reduce its £4.5bn debt pile.

Haslett himself described investor reaction as 'mixed', with one analyst warning shareholders 'are not going to like this news one bit'.

Customers will not face additional bill hikes from the new £1bn investment plan, Pennon insists, though bills are already rising under existing Ofwat-agreed spending.