Troubled South West Water owner taps investors for £550m days after being handed record fine for sewage spills

Updated: 04:57 EDT, 7 October 2026 The owner of embattled South West Water is tapping investors for £550million to help fund infrastructure investment, days after it was fined nearly £8million for repeated sewage spills.Pennon Group’s cash call follows a strategic review launched by newly appointed chief executive Keith Haslett, who warned the company needed to ‘improve and deliver better outcomes’.That will see the FTSE 250 firm, which also owns Bristol Water and Bournemouth Water, plough £1billion more into its infrastructure, on top of the £2.6billion already committed under agreed plans with regulator Ofwat. Meanwhile, Pennon plans to lower its dividend by around 30 per cent and is eyeing a sale of its renewable energy subsidiary, Pennon Power, to help cut debt, which stood at £4.5billion at the end of March. Shares in Pennon plunged 17 per cent, bringing this year’s losses to 29.5 per cent. South West Water was handed a record fine for a series of sewage spills Haslett, who took the helm in April, said: ‘It's clear from my comprehensive review that Pennon has real strengths, but there are areas where we need to improve and deliver better outcomes for our customers and communities. 'I have looked hard at how we operate, maintain and invest in our assets, and today we are setting out in detail what we are doing.’It comes after South West Water was last week described by a judge as ‘reckless’ as she handed down a fine of £7.9million for ‘horrendous’ sewage spills between 2015 and 2021 – £1.1million of which was for a single incident.The water firm pleaded guilty at Plymouth magistrates' court to 18 charges, 17 of which were for illegal water discharge activities.Judge Matson said: 'In this case there were hundreds of incidents of sewage spills on to our beaches and into our waterways and sea and untreated sewage gushed through the harbour wall into the harbour at Polperro on a bank holiday weekend.'The seven-figure fine is the largest South West Water has received and comes just months after it was ordered to pay £1.8million over a parasite outbreak that made hundreds ill in Devon.Pennon’s update comes after Andy Burnham said he would legislate to repeal a ban on the public ownership of water companies.The Prime Minister told Labour conference that 'it stinks' that the public are picking up the bill for 'sewage in our seas' and announced plans to 'repeal Margaret Thatcher's ideological ban on public ownership of water companies'.DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you