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Severn Trent Plc - Retail Offer via PrimaryBid

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Severn Trent Plc

("Severn Trent", the "Company" or the "Group")

Retail Offer via PrimaryBid

Retail Offer

Severn Trent is pleased to announce a retail offer via PrimaryBid of new ordinary shares (the "Retail Offer Shares") of 9717/19 pence each in the capital of the Company (the "Retail Offer").

As separately announced today, the Company is conducting a non-pre-emptive placing of new ordinary shares (the "Placing Shares") of 9717/19 pence each in the capital of the Company (the "Placing") through an accelerated bookbuilding process (the "Bookbuild"). The price at which the Placing Shares are to be placed (the "Placing Price") will be determined at the close of the Bookbuild. In addition, certain members of the Board and the Executive Management Team of the Company intend to subscribe for new ordinary shares (the "Subscription Shares") of 9717/19 pence each in the capital of the Company alongside the Placing (the "Subscription").

The issue price for the Retail Offer Shares, as well as for the Subscription Shares, will be equal to the Placing Price.

Rationale for the Retail Offer and Use of Proceeds

On 31 January 2021, Severn Trent submitted proposals, which if approved, would enhance the natural environment whilst creating jobs in the Midlands and drive long-term sustainable benefits for customers and communities in the Severn Trent region. Following its review process, Ofwat has endorsed all six projects and announced on 17 May 2021 an award to Severn Trent of £624 million1 (the "Green Recovery Award").

The proceeds of the Placing, Retail Offer, and Subscription will be used to fund the six projects under the Green Recovery Award (the "Projects"). Collectively the Projects support the wider national agenda on climate change and the need for greater water supply security. They will support long-term growth through decarbonising the supply of water, accelerating environmental improvements in the Severn Trent region, creating bathing quality rivers, replacing lead supply pipes, building a sustainable flood-resilient community, and installing smart meters for customers. In aggregate, the Projects represent a significant incremental investment opportunity over the next four years and importantly will supplement the work Severn Trent does now in its region, providing employment, resilience and an improved natural environment.

The Projects will drive RCV growth significantly ahead of previous expectations, on which the Company will earn a future return, whilst maintaining its current capital structure.

The proposed issue and allotment of the Placing Shares, Retail Offer Shares, and Subscription Shares is within th e existing shareholder authorities granted to the Company at its Annual General Meeting held on 15 July 2020.

The Board's belief is that the Placing, Retail Offer, and Subscription are in the best interests of shareholders and the Company's wider stakeholders.

A presentation has been made available on the Company's website which contains further information relevant to the Placing.

1 Quoted in nominal prices. Equivalent to approximately £565 million in 2017/18 prices.

Details of the Retail Offer

The Company values its retail investor base and as a result the Retail Offer will give retail investors the opportunity to participate in the Company's equity fundraising alongside the Placing and the Subscription.

The Retail Offer will be open to retail investors immediately following release of this announcement who can apply exclusively through the PrimaryBid mobile app available on the Apple App Store and Google Play. PrimaryBid does not charge investors any commission for this service.

The Retail Offer will close at the same time as the Bookbuild Process is completed. The Retail Offer may close early if it is oversubscribed.

The Company reserves the right to scale back any order at its discretion. The Company and PrimaryBid reserve the right to reject any application for subscription under the Retail Offer without giving any reason for such rejection.

The Retail Offer is offered under the exemptions against the need for a prospectus allowed under the Prospectus Rules. As such, there is no need for publication of a prospectus pursuant to the Prospectus Rules, or for approval of the same by the Financial Conduct Authority in its capacity as the UK Listing Authority. The Retail Offer is not being made into any jurisdiction where it would be unlawful to do so.   In particular, the Retail Offer is being made only to persons who are, and at the time the Retail Offer Shares are subscribed for, will be outside the United States and subscribing for the Retail Offer Shares in an "offshore transaction" as defined in, and in accordance with, Regulation S ("Regulation S") under the U.S. Securities Act of 1933, as amended (the "Securities Act"). Persons who are resident or otherwise located in the United States will not be eligible to register for participation in the Retail Offer through PrimaryBid or subscribe for Retail Offer Shares.

The Retail Offer Shares, when issued, will be fully paid and will rank pari passu in all respects with each other and with the existing ordinary shares of 9717/19 pence each in the capital of the Company, including, without limitation, the right to receive all dividends and other distributions declared, made or paid after the date of issue.

Applications will be made (i) to the Financial Conduct Authority for admission of the Retail Offer Shares to the premium listing segment of the Official List; and (ii) to the London Stock Exchange   for admission of the Retail Offer Shares to trading on its main market for listed securities (together, "Admission").

Settlement for the Retail Offer Shares and Admission are expected to take place on or before 8:00am on 21 May 2021. The Retail Offer is conditional upon Admission becoming effective and on the placing agreement entered into by the Company not being terminated in accordance with its terms prior to Admission.

No commission is charged to investors on applications to participate in the Retail Offer made through PrimaryBid.  It is vital to note that once an application for Retail Offer Shares has been made and accepted via PrimaryBid, an application cannot be withdrawn.

There is a minimum subscription of £100 per investor under the terms of the Retail Offer which is open to existing shareholders and other investors subscribing via the PrimaryBid mobile app.