LETTERS TO THE EDITOR - Ofwat has considered the risks

Sir – The leader article entitled “The Genius of Leverage” (see GWI, Vol 3, Issue 11, p.5) raises the issue of how Ofwat could avoid liability should a highly leveraged water company become insolvent as a result of a regulatory decision which would not have so affected a company with a more broad equity base.

We have made our position on thin equity structures quite clear. We will make no special concessions for companies which choose to adopt what might be more risky capital structures. We said so in our position paper which we published after consultation on the Glas Cymru proposals and in MD166, an open letter to all [English and Welsh water company ...

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