Yorkshire Water Services Ltd – Measures to improve financial resources

LEI 2138006E2VG89XLORJ06

YORKSHIRE WATER ANNOUNCES MEASURES TO IMPROVE ITS FINANCIAL RESOURCES

October 13, 2022

Yorkshire Water today announces that it has agreed with Ofwat that intercompany loans due from another Kelda Group company, totaling £941.3 million over March 31, 2022, will be repaid by March 2027. The repayment is expected to include capital injections and cash generated in Yorkshire Water that could otherwise have been distributed to shareholders as dividends. Part of this amount, around £100m, will be invested over the remainder of AMP7 to reduce storm overflow discharges.

These two measures combined will further strengthen Yorkshire Water’s operational resilience and financial resources for AMP8. The investment to reduce storm overflow discharges will aim to achieve a minimum reduction of 20% of permitted discharges 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The intercompany loans were originally made in connection with the acquisition of Kelda Group plc in 2008 and are excluded from the calculations of reported indebtedness and interest coverage for covenant purposes. Reported regulatory indebtedness is expected to not exceed 72% at the end of PGA7 and interest coverage to improve as these loans are repaid.

Yorkshire Water shareholders have agreed to support the repayment of intercompany loans and additional investment to reduce storm overflow discharges. This means shareholders will have waived dividends for nine years during AMP6 and AMP7. This demonstrates shareholders’ continued commitment to investing in improving Yorkshire Water’s performance, protecting the environment and ensuring the financial resilience of the business in the future.

Commenting, Yorkshire Water and Kelda Holdings CEO Nicholas Shaw said:

“We understand the importance of continuing to have strong financial structures and believe that the repayment of intercompany loans will maintain our resilience going forward in a period of significant external economic uncertainty.

“Our shareholders have pledged to help us make this repayment, including the additional investment in storm surges which will have a significant impact on our rivers and coasts here in Yorkshire.”

Remarks

it’s an investment of £100 million after the regulatory mechanisms come into effect.

For press inquiries, please contact:

Emily Bradycommunications manager

Email: [email protected]

For debt inquiries, please contact:

David Gregcorporate finance manager

Email: [email protected]

Louis R. Hancock