LEI
213800O8BDOGHJMTCP32
LEI
213800SPVHJCCUH13862
YORKSHIRE WATER ANNOUNCES MEASURES TO
IMPROVE ITS FINANCIAL RESOURCES
13 October
2022
Yorkshire Water announces today that it has agreed with Ofwat
that intercompany loans owed by another Kelda Group company,
totalling £941.3 million on 31 March
2022, will be repaid by March 2027. It is anticipated
that the repayment will include capital injections and cash
generated in Yorkshire Water that could otherwise have been
distributed to shareholders via dividends. A portion of this,
c.£100 million will be invested during the remainder of AMP7 to
reduce storm overflow spills.
These two measures combined, will further strengthen the
operational resilience and financial resources of Yorkshire Water
for AMP8. The investment to reduce storm overflow spills will
look to achieve a minimum reduction of 20% in permitted spills per
year by March 2025 from the 2021
baseline.
The intercompany loans were originally made in connection with
the acquisition of Kelda Group plc in 2008 and are excluded from
the calculations of reported gearing and interest cover for
covenant purposes. It is anticipated that reported regulatory
gearing will reduce to no higher than 72% at the end of AMP7 and
interest cover will improve as these loans are repaid.
Yorkshire Water’s shareholders have agreed to support the
repayment of the intercompany loans and the additional investment
to reduce storm overflow spills. This means shareholders will
have foregone dividends for nine years during AMP6 and AMP7. It
demonstrates the shareholders’ continuing commitment to invest in
improved performance at Yorkshire Water, to protect the environment
and to ensure the financial resilience of the business into the
future.
Commenting, Yorkshire Water and Kelda Holdings CEO Nicola Shaw said:
"We understand the importance of continuing to have robust
financial structures in place and believe that the repayment of the
intercompany loans will continue our resilience into the future in
a time of significant external economic uncertainty.
“Our shareholders have committed to helping us make this
repayment, including the additional investment in storm overflows
which will have a significant impact on our rivers and coastlines
here in Yorkshire.”
Notes
c£100million investment is after the application of regulatory
mechanisms.
For press enquiries, please contact:
Emily Brady, Communications
Manager
Email: emily.brady@yorkshirewater.co.uk
For debt enquiries, please contact:
David Gregg, Head of Corporate
Finance
Email: debtir@keldagroup.com
