US investment firm Corsair Infrastructure Partners is considering selling its 30% share in Kelda Group, owners of Yorkshire Water, according to a report in The Sunday Times.
In addition to Corsair, which represents a number of infrastructure investment funds, other investors in the parent company of the Yorkshire Water group, include GIC Special Investments Pte Ltd, the private equity investment arm of the Government of Singapore, Deutsche Asset Management's infrastructure investment arm and SAS Trustee Corporation, the trustee of several New South Wales public-sector superannuation schemes.
Corsair acquired the management of funds held by Citi Infrastructure Investors under an investment management agreement in 2015.
The article says “it is thought that Corsair’s shareholding in Yorkshire Water may be worth between £300 million and £500 million.”
The Sunday Times quotes a “well-placed source” as saying that Corsair is currently “exploring options” for its 30per cent stake.
According to the report, representatives from both Yorkshire Water, acting on behalf of Kelda and from Prosek Partners, acting on behalf of Corsair Capital, both separately declined to comment.
Yorkshire Water submitted its AMP8 Business Plan to Ofwat in October which outlined a £7.8 billion investment across the region between 2025 and 2030.
In October 2022 Ofwat closed the investigation it launched in May 2022 in relation to two inter-company loans Yorkshire Water had in place. The loans, totalling approximately £940 million, were from Yorkshire Water, as the lender, to an associated company within the same corporate group structure - the borrower.
Ofwat was concerned about the arrangements for the repayment of the loans and the ability for Yorkshire Water to call back the loaned resources. Whilst both loans enabled Yorkshire Water to call in the loan, there was no contracted repayment date otherwise specified for them.
During the Yorkshire Water secured a repayment plan with its corporate group for a staged repayment of the full value of the loans as follows:
- At least £300 million to be repaid by the end of June 2023
- A further £200 million by the end of March 2025
- Remaining balance (around £440 million) by the end of March 2027
Yorkshire Water is also among a number of companies under the microscope as part of an ongoing investigation by Ofwat into how companies manage their wastewater treatment works.
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