Costain Group PLC has announced an agreement to sell its minority shareholdings in three joint venture companies to Severn Trent Plc for £12 million.
The sale and transfers were completed yesterday. Upon completion, Severn Trent became the 100% owner of the three companies which provide services in the water sector.
As a result of the sale, Costain will realise a profit of £9.1 million in 2013, which is in addition to the Board's previous expectations for the full year. The Group will use the funds for investment and working capital purposes.
The sale forms part of Costain’s continuing disposal of its PFI equity portfolio.
Severn Trent Costain was set up in June 2012 to offer water and waste water management for commercial and industrial water users, building on their existing joint venture, C2C Service established to carry out Project Aquatrine, a 25-year PFI contract, for the Ministry of Defence.
Severn Trent Costain signed a multi-million pound contract in September with dairy firm First Milk, to design, build and operate a new wastewater treatment plant at its Haverfordwest Creamery
The business will now continue as Severn Trent Services.
In line with Severn Trent's overall strategy of focus on water, the business will continue to operate in the developing market for UK business solutions in water, leveraging Severn Trent's skills and expertise to offer non -household customers in the UK a single expert supplier for all of their water and waste water needs, from source to disposal.
Severn Trent Plc chief executive Tony Wray said:
"We are in a position where Severn Trent commands the expertise, commitment and full-service skills to take this business forward for the long term.
We look forward to continuing to work with our customers and future customers to further improve service standards and the economics of their business."
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