Citi is looking to sell off its 30 per cent share in Yorkshire Water’s parent company, Kelda Water, which it acquired in 2008 as part of a £3 billion takeover which it led alongside GIC, Singapore’s sovereign wealth fund.
Two of the other three stakeholders, Deutsche Bank and M&G, are also reportedly looking to sell their 23 and 10 per cent stakes respectively. GIC is said to be keen to retain its 26 per cent stake.
Citi has recruited Evercore investment bank to find a buyer for its 30 per cent stake in Kelda Water.
In a statement, Yorkshire Water said: “We are aware of Citi’s decision to review its investment in Kelda. It is not unusual for companies to trade their investments.”
Citi’s plan to sell its stake in Kelda Water follows a credit rating downgrade of the water company by Moody’s due to the impact of low interest rates and concerns over its debt hedging strategy.
The announcement also follows Ofwat chairman Jonson Cox’s comments at the end of last year that calling for “dynamic and differentiated” approaches to any M&A activity.