AWG faces 'no' vote on revamp

AWG will this week face the possibility of its £2.7bn restructuring plans being voted down by shareholders, amid fresh concerns about the deal.

One institutional shareholder, who asked to remain anonymous, described the plan as "plenty of pain with little gain" and revealed that he was considering a "no" vote.

Tuesday's ballot is to rubber-stamp an amendment to the company's borrowing limit, which is central to the restructuring plan. Less than 75-per-cent approval would force Chris Mellor, AWG's chief executive, back to the drawing board.

The utility wants to ring-fence its water operation and form a separate infrastructure management business.

Some shareholders believe this will make AWG's shares higher risk. The result of the ballot will be announced at AWG's interim results on Wednesday. Bondholders will vote separately on Friday.

Already, AWG has been forced to offer bondholders an additional sweetener, after they threatened to vote against the plans.

Shareholders will share between £400m and £600m in a cash payment.

In a letter sent to investors earlier this month, AWG revealed that the restructure would cost £128m, including £50m in advisers' and legal fees.