EQT takes a significant stake in Yorkshire Water parent, Kelda

(by Verity Mitchell)

EQT, a Swedish private equity group, has bought a 42% stake in Kelda Holdings, the Jersey-registered parent company of Yorkshire Water, at an undisclosed premium to regulatory capital value.

The deal saw Wharfedale Hong Kong (managed by Deutsche Bank’s DWS division) offloading its 23.37% stake, and Gateway Infrastructure Hong Kong (managed by Corsair Capital), selling its 30.32%. Both had been looking to sell their positions — which combined could have given a single investor an outright majority stake — since at least 2017.

The move will effectively make EQT Yorkshire Water’s joint owner. The stake of existing shareholders will increase: GIC, Singapore's sovereign wealth fund, from 33.56% to 42%; and TCorp, the investment vehicle of Australia’s New South Wales public sector pension fund manager, from 12.75% to 16%.

EQT has pledged to invest additional equity into Kelda, partly in order to help refinance a £600m inter-company loan which is due next spring. It has also stated that it is supportive of Yorkshire Water’s investment plans.

EQT manages €210bn of funds. Its other major water investments include majority ownership of project developer Seven Seas Water, and a 50% stake in Paris-based water services provider Saur. It also owns the energy-from-waste company Encyclis, which operates in the UK and Ireland. 

EQT states that its purpose is “buying good companies and making them great”. Its strategy is to invest in: value-add infrastructure, active core infrastructure and transition infrastructure.