Bournemouth Water (established 1863) and West Hampshire Water (established 1893) were two former statutory water companies established by Act of Parliament.
The Bournemouth company also supplied gas until the nationalisation of the gas industry in 1949.
As statutory companies listed on the London Stock Exchange, they had access to the market for funds, but dividends were fixed. Most financing was by fixed dividend ordinary or preference shares and by debentures.
With the opportunities presented by privatisation of the former Water Authorities in 1989, the two companies came under a joint majority shareholding, through Biwater, the British multinational water engineering group.
A common board of directors and management team was established in 1990, in preparation for amalgamation of the two companies under a memorandum of understanding with Ofwat, the industry’s economic regulator.
In preparation for this, the companies converted to Plc status from statutory companies in 1992. This enabled them to adopt a memorandum and articles of association under the Companies Acts, thereby allowing them to uncap dividends and to diversify outside the core water supply business.
The companies merged into a new company, Bournemouth & West Hampshire Water Plc, on 1 July 1994, through schemes of arrangement under the Water Industry Act 1991. This new company was not listed and the former companies de-listed in May 1994 as they no longer met the listing criteria of 25% of their equity being in "public" hands.
In March 1996, the company converted £25 million of ordinary share capital into £25 million 8.5% cumulative irredeemable preference shares, which were admitted to the Official List. These shares were placed with a variety of institutional investors.
In December 2004, Ofwat set price limits using a stylised balance sheet. This made the preference shares inefficient from a financing perspective and the company repaid them through a court-approved reduction in capital in April 2005.
As a consequence the company de-listed these shares and refinanced its business using long term (2033) index linked wrapped bonds under the Royal Bank of Scotland’s Artesian programme. This refinancing structured the company’s balance sheet at the level of gearing considered to be optimal by Ofwat.
On 1 April 2000, the company became the principle component of a 50/50 joint venture (JV) partnership between Biwater and the Dutch multi-utility company, Nuon. The JV company, Cascal, developed investment opportunities in the $200 billion per year global market for private sector participation in the water and wastewater sectors.
In August 2005 Biwater and Nuon reached agreement on the sale of Nuon’s 50% interest in Cascal. The transaction was subject to approval from the relevant authorities and was in line with Nuon’s strategy of concentrating on energy activities in the core countries of the Netherlands, Belgium and Germany.
The sale was completed in June 2006 and from that date Cascal became 100% owned by Biwater. In January 2008, Cascal undertook an Initial Public Offering (IPO) of its common stock and became listed on the New York Stock Exchange with an enterprise value of $600 million.
In July 2010, Bournemouth and West Hampshire Water was acquired by Sembcorp Utilities, a wholly owned subsidiary of Sembcorp Industries, a leading energy, water and marine group listed on the Singapore Stock Exchange.
With Sembcorp as its ultimate shareholder, Bournemouth and West Hampshire Water Plc changed its registered name to Sembcorp Bournemouth Water Ltd on 21 January 2011. The change of name presented an opportunity to modernise the company brand and allow Sembcorp to raise its profile in the UK.
On 16 April this year, FTSE 250 company Pennon Group Plc
acquired Sembcorp Bournemouth Water, which immediately changed its registered name to Bournemouth Water Ltd. Pennon Group Plc is an environmental utility infrastructure company which owns South West Water Ltd
and Viridor Ltd
. The Group has assets of around £5 billion and a workforce of around 4,500 people and is based in Exeter, Devon.
Bob Taylor, Managing Director