Yorkshire Water seeks greater than £1bn from buyers

Yorkshire Water, one of many UK’s greatest water corporations, has tapped shareholders for £940mn to shore up its fragile steadiness sheet.

The corporate, which serves 2.3mn households and 130,000 companies in north-west England, had been below scrutiny from water regulator Ofwat, which raised issues over its “monetary well being” in its annual report on the trade final yr.

The cash can be used to pay down intracompany loans below Yorkshire Water’s sophisticated construction, which features a holding firm referred to as Kelda Group, registered in Jersey, and buyers Deutsche Asset Administration, the personal fairness fund Corsair Capital and the Singaporean sovereign wealth fund GIC. The corporate has additionally agreed an extra £100mn to scale back spills on storm overflows.

Fairness injections have been uncommon within the three a long time because the regional water monopolies in England and Wales have been privatised with no debt and handed £1.5bn to make enhancements. However they’ve turn into extra frequent prior to now two years as borrowing ranges grew to become unsustainable. They’re additionally going through public protests over sewage outflows in coastal waters and rivers because of under-investment in infrastructure.

In July, Thames Water, the most important water monopoly, introduced an preliminary £500mn money injection from shareholders this yr which may be elevated by one other £1bn. Final yr Southern Water was additionally rescued from chapter with a £1bn capital injection by the Australian asset supervisor Macquarie.

David Black, chief government of Ofwat, stated: “We’re happy that Yorkshire Water recognised our issues and is taking these lively steps to enhance its monetary place within the curiosity of consumers.”