Ofwat has consented to requests from Yorkshire Water to change it’s structure so as to remove Cayman Islands incorporated subsidiaries from the YW Financing Group.
This simplification of the company’s structure has been permitted on the basis that
The proposed changes to the financing structure of the YW Financing Group do not substantively change the nature of the cross-default and guarantee arrangements to which Ofwat previously granted consent;
The purposes of these particular cross-default and guarantee arrangements is to facilitate the financing of the Appointed Business with such arrangements being confined within the YW Financing Group (which excludes Kelda Group Limited);
No changes in covenants and credit ratings are expected and the relevant transaction will be substantially neutral from a tax, credit rating and gearing perspective;
The transaction enables YWS to simplify its financing structure and remove the Cayman companies from the YW Financing Group. The costs of the transaction will not be borne by customers and on their own the quantum of these costs does not result in a significant threat to the financial resilience of YWS.
More information can be found in the Ofwat correspondence here.
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