Leading UK bank Royal Bank of Scotland is to acquire a quarter share of Southern Water having agreed a deal with seller Veolia Environnement, reports have suggested.

According to a number of news outlets in the UK, French company Veolia is believed to have agreed to divest its 25% share in the water utility for between GBP200 million and GBP300 million. Once it has acquired the French outfit’s stock RBS will hold a 40% stake of Southern Water.

RBS has refused to comment on the speculation.

Southern provides water supplies to around one million homes in Kent, Sussex and Hampshire. It also treats and recycles water in about two million homes, according to the BBC.

The company has recently been in trouble with the UK water regulator Ofwat, which appears poised to issue the company with a multi-million pound fine for failing to compensate customers for delays in handling complaints and misrepresenting its performance in official submissions, the Daily Telegraph newspaper has reported.