PN 12/05: Ofwat consults on planned change of ownership for Sutton and East Surrey Water

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PN 12/05	27 May 2005
Ofwat consults on planned change of ownership for Sutton and East Surrey Water

Ofwat today launched a consultation exercise into the proposed acquisition of Sutton and East Surrey Water.

Kellen Acquisitions Limited (Kellen) announced last month that it planned to acquire East Surrey Holdings, the owner of Sutton and East Surrey Water. Kellen is a company formed by Terra-Firma Investments Limited (TFI).

In a consultation paper published today Ofwat is proposing changes that will help to ensure that Sutton and East Surrey Water is ring-fenced from the other activities of its group. This will also bring it into line with the appointment conditions of other water companies.

Ofwat is also inviting views on any regulatory issues arising from the proposed acquisition, including the:

Capacity of Kellen to be the owner of a regulated water company;
Need for any other changes to Sutton and East Surrey's conditions of appointment to protect customers' interests; and
Ability of Sutton and East Surrey to finance its functions as a water company, including current and future capital investment programmes.

Sutton and East Surrey is the sixth largest of the 13 water-only regulated water companies with an average regulatory capital value of £135 million in 2004-05. It supplies water services to 270,000 domestic and business customers across the London boroughs of Croydon, Merton and Sutton, East Surrey and parts of Kent and Sussex.

Notes to Editors:
1. The Director General of Water Services is the economic regulator of the water and sewerage companies in England and Wales. He exercises his powers in a way that he judges will allow them to carry out their functions properly, and finance them.
2. Copies of the consultation document will be available from the Ofwat website on www.ofwat.gov.uk or from the Ofwat library on 0121-625 1373.
3. Responses should be sent to Keith Mason, Director of Regulatory Finance, Ofwat, Centre City Tower, Hill Street, Birmingham B5 4UA (fax: 0121-625 3609), or by email to keith.mason@ofwat.gsi.gov.uk to arrive no later than 5pm on 16 June 2005.
4. Ofwat will place all responses in the Ofwat library unless they are clearly marked "confidential".

MEDIA ENQUIRIES TO OFWAT PRESS OFFICE ON: 0121 625 1416/1496/1442
Out of hours enquiries to pager: 08700 555 500 water 503/509. Ofwat publications and press notices can be found on Ofwat's website at: www.ofwat.gov.uk

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