Australian fund manager Hastings has agreed to buy an additional 50 percent of UK water firm South East Water from CDPQ.
The agreement to buy the stake from the Canadian pension fund means South East Water is once again under full control of funds managed by Hastings, a little over six years after it sold the 50 percent share to CDPQ.
A source close to the matter confirmed to Infrastructure Investor that it had exercised pre-emption rights to take up the deal.
Hastings first took full control of the utility company in 2006 when Hastings Diversified Utilities Fund and the Utilities Trust of Australia bought out Macquarie in a £665.4 million ($829.3 million; €780.7 million) deal. In December 2010 it sold 50 percent back to CDPQ for £165 million. Hastings declined to disclose the size of the latest deal.
The firm said the investment was made on behalf of CDPQ’s compatriot Desjardins Group, as well as another unnamed client. South East Water recorded a £74.8 million operating profit in the 12 months to March 2016, a 6.1 percent fall from the previous year. A report by Moody’s in October said UKs water companies could be affected by a revenue cut in the event of bills being lowered in a pricing review in 2019.
The firm owned by Westpac, an Australian bank, suspended fundraising for its €1.5 billion European Core Infrastructure Income Fund last year following uncertainty generated by the UK’s EU referendum.