RNS Number:0449Q
Bristol Water PLC
23 September 2003


Bristol Water plc

23 September 2003


NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, 
CANADA, AUSTRALIA OR JAPAN.


                               BRISTOL WATER PLC

Bristol Water plc notes the announcement made today by Bristol Water Holdings 
plc, the text of which is set out below.


                          "BRISTOL WATER HOLDINGS PLC
                      PROPOSED #50 MILLION RETURN OF VALUE

Having previously decided to concentrate on the group's core water skills, the
Board announced at Bristol Water Holdings plc's ("BWH" or the "Company") Annual
General Meeting, held on 21 July 2003, that it was actively reviewing methods of
returning value to shareholders and that it believed that, after implementing
the necessary restructuring, it should be able to recommend a return of
approximately #50 million, equivalent to approximately #1.35 per ordinary share.

As an initial step to put BWH into a position to achieve this, it is proposing a
scheme of arrangement pursuant to s.425 of the Companies Act 1985 (the "Scheme
"). The Scheme, which will require shareholder and Court approval, will result
in the creation of a new holding company for the group, to be named Bristol
Water Group plc.

If the Scheme is approved by the Court and shareholders, shareholders will
exchange their shares in BWH for new shares in Bristol Water Group plc.
Application will be made for the shares in Bristol Water Group plc to be listed
on the Official List and traded on the London Stock Exchange.  Documentation
relating to the Scheme is expected to be posted to shareholders in early October
and the necessary shareholder meetings are expected to take place towards the
end of October.  Assuming all the necessary approvals are obtained, the Scheme
would become effective in mid November.

Ecofin Water & Power Opportunities plc and AXA Investment Managers have given
written indications to the Company of their intention to vote in favour of the
Scheme at the Court and shareholder meetings in respect of 14,558,205 shares,
representing 38.9 per cent. of the total issued share capital of BWH.

If this initial step is implemented, the Board currently intends to put further
proposals to shareholders shortly after the Scheme becomes effective for a
return of value.  If such proposals are approved and implemented and the group
is able to secure the additional borrowings, this should allow payment to
shareholders to be made before the end of the Company's current financial year.

Ofwat has indicated that the Director General of Water Services will seek some
modifications to Bristol Water plc's licence in connection with the proposed
utilisation of the Artesian facilities to increase the level of Bristol Water
plc's borrowings. The Board expects that they will be broadly similar to those
agreed to by other companies in the sector which have substantially increased
their gearing. The main changes are likely to concern a financial ring-fencing
of Bristol Water plc's regulated business, the management and conduct of that
business and the role of Bristol Water Group as the ultimate owner of Bristol
Water plc.

Trading at Bristol Water plc remains in line with the Board's expectations.
Trading at Lawrence has fallen short of the Board's expectations as a result of
poor performance on two contracts. The Board has received a number of
preliminary offers for Lawrence which, in addition to alternative options, it is
evaluating.

The Company intends to announce its interim results on 4 December 2003.

Enquiries

Bristol Water Holdings plc                  Tel: 0117 953 6407
Alan Parsons, Chief Executive
Andy Nield, Group Finance Director

Dresdner Kleinwort Wasserstein              Tel: 020 7623 8000
Ishbel Macpherson, Managing Director

Dresdner Kleinwort Wasserstein Limited, which is authorised by the Financial
Services Authority, is acting for BWH and no one else in connection with the
Scheme and is not acting for any person other than BWH and will not be
responsible to any person other than BWH for providing the protections afforded
to its customers or for providing advice in connection with the Scheme and the
other matters described herein."




                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

MSCUUSRROORKUUR