United Utilities, Severn Trent shares down on wastewater probe

(Reuters) -Shares in United Utilities and Severn Trent fell on Tuesday after the UK's water regulator opened enforcement cases into them, as well as two others, as part of its ongoing probe into wastewater management.

United Utilities and Severn Trent were among the top percentage losers on the blue-chip FTSE 100 index, and were down 2.5% and 2.7% respectively as of 1009 GMT.

Shares in FTSE midcap water firm Pennon were down 2.4%.

Thames Water's April 2027 bond fell 1.3 pence on the day to 75.65 pence on the Tradeweb platform. It was trading around 85 pence prior to the release of regulator Ofwat's draft recommendations on July 11.

The regulator said it has also served notices to Dŵr Cymru Welsh Water and Hafren Dyfrdwy, a unit of Severn Trent, to gather evidence for the investigation.

Ofwat, which regulates the privatised water and sewerage industry in England and Wales, said the new cases were opened after analysing data on how often these companies spill from storm overflows and amid "heightened" concerns that the firms might not be fulfilling their obligations to minimise pollution.

In 2021, Ofwat launched an industry-wide probe into how companies manage their wastewater assets, and there are now 11 water and wastewater companies covered by its investigation.

(Reporting by Aby Jose Koilparambil in Bengaluru and Alun John in London; editing by Nivedita Bhattacharjee and Jason Neely)