A Morgan Stanley-backed venture acquired 90 percent of Veolia Water, which operates in the south of Britain, for £1.2bn. Veolia Environment will maintain its 10 percent share for at least five years according to a statement.

The move is part of CEO Antoine Frerot’s plans to reduce Veolia’s debt by €3bn by the end of next year in a bid to increase profitability. Frerot has previously said he will pursue further asset sales in the UK and the US in the coming months.

“This first significant divestment shows that we are moving in the right direction regarding the implementation of our strategic plan,” Frerot said in a statement. “The transformation of Veolia is progressing at a good pace.”

Veolia Water currently serves 3.5m people in England, through three regional companies. Their combined annual turnover is in excess of £274m and 1,250 people are employed by the company.