A 20% stake in Bristol Water has been sold by Capstone Infrastructure Corporation of Canada to Japanese utility giant ITOCHU Corporation for £42m ($68m).
The deal leaves the Canadian investment company with a 50% controlling interest with the remaining 30% stake held by Suez Environnement through its Agbar subsidiary, the largest private water company in Spain.
Capstone CEO Michael Bernstein said: “Bristol Water remains a significant long-term investment. This transaction clearly validates the value of our initial investment in Bristol Water and underlines the appeal of the UK water sector to infrastructure investors globally.” Proceeds from the disposal will be used to reduce debt which matures this year.
Tokyo-based ITOCHU was founded in 1858 and has around 130 offices in 67 countries. Its other global infrastructure holdings include development projects in renewable energy and power generation, transport, water and desalination facilities.
It said it will offer its expertise in support of Bristol Water’s mission to provide a highly-reliable supply of water of excellent quality, delivered in a sustainable and affordable way.
“Furthermore, ITOCHU wishes to contribute to Bristol Water by bringing in unique technologies and services available in Japan,” the company said in a statement.
Capstone has entered into a memorandum of understanding with ITOCHU to explore joint infrastructure investment opportunities in utilities in OECD countries. The Japanese company has nominated project manager Hajime Ichishi to replace non-executive director Stuart Miller who has resigned from the Bristol Water board.
Bristol Water supplies 1.16m people in a 2,400 sq kilometres area around the city.
Mr Bernstein added: “With ITOCHU, we are gaining a new partner with diverse international relationships and a broad scope of businesses, which fits well with our focus on building a diversified portfolio of core infrastructure businesses globally. The ITOCHU team offers considerable infrastructure development and investment expertise and we are pleased to welcome them to Bristol Water.”
