TALLINN - International Water has sold its holding in Tallinna Vesi, Tallinn's main water company, to its strategic partner United Utilities. The deal, which was reportedly financed by the European Bank for Reconstruction and Development, was signed last week. The amount of the deal was not disclosed.
In addition, United Utilities will acquire the holdings of International Water in Sofiyska Voda AD (Bulgaria) and Aqua SA (Poland).
Previously the two companies, United Utilities and International Water, owned 50.4 percent of Tallinna Vesi.
The EBRD said on its Web site that International Water's stake in Tallinn's water company was being sold to the co-shareholder United Utilities BV, who is interested in the further development and long-term sustainability of the project.
Tallinna Vesi Chairman Bob Gallienne earlier confirmed that United Utilities and the EBRD had teamed up for the acquisition and said that United Utilities had a long-term perspective on the business in Estonia.
United Utilities Europe Holdings BV is a Dutch-registered indirect subsidiary of United Utilities, a publicly listed company on the London Stock Exchange.
The amount of EBRD finance and the total project cost still have to be determined.
International Water and United Utilities bought 50.4 percent of Tallinna Vesi in 2000 for an estimated $73 million. As part of the tender at the time, the city of Tallinn demanded investments of at least 4 billion kroons ($210 million) over 12 years to complete the construction of a new sewer network by 2006.
The first investments were to focus on the pipe network, 30 percent of which dated back to 1840, according to city water officials.
Last year Tallinna Vesi's supervisory council approved a major reorganization plan to make the company work more effectively. Part of the plan included laying off as many as 100 workers.
