Water industry regulator Ofwat has launched a consultation on the completed acquisition of Northumbrian Water Group Plc by UK Water (2011) Limited.
The consultation relates to the new owner and whether any modifications should be made to its instrument of appointment.
The consultation document, describes the completed acquisition of NWG by UK Water, explains the statutory position on mergers, describes the group ownership and structure, sets out the regulatory issues and sets out Ofwat's initial assessment of the issues, including:
- the capacity of UK Water and its investors to be the owners of a UK regulated water business;
- which entities should provide parent undertakings to NWL under Condition P of its Appointment;
- the need for modifications to NWL’s Appointment to ensure that, whoever its owners, it has sufficient financial and managerial resources to carry out its functions as a water and sewerage company and is appropriately ring-fenced from the rest of the group
Although Ofwat as the economic water regulator has no formal role in acquisitions or mergers of water companies, in the interests of water consumers it looks to ensure that any owner of a water company is ‘fit and proper’ to provide such an essential public service.
Deadline for submission of responses is 9 December 2011.
Click here to access the consultation documents.
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