Yorkshire Water Finance Plc - Measures to Improve Financial Resources
PR Newswire
London, October 13
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The intercompany loans were originally made in connection with the acquisition of Kelda Group plc in 2008 and are excluded from the calculations of reported gearing and interest cover for covenant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
