In September 2018, companies submitted their business plans to Ofwat as part of the regulatory review process which will conclude in December 2019 and set prices for the five years from April 2020. We expect a tough settlement with companies facing lower allowed returns, penalties for high gearing and more demanding cost efficiency targets. Increased penalties for underperformance, competition in some of the companies’ activities and legacy adjustments for past performance could further weaken cash flows.Discussion Topics:
• Companies submitted their plans against the backdrop of lower allowed returns as well as significant public and political scrutiny
• Business plans seek to address regulatory priorities, but have they gone far enough?
• Plans will be subject to regulatory challenge and many companies may struggle to maintain credit quality
• Cash flows could also be weakened by performance penalties, competitive pressure in certain activities as well as legacy adjustmentsSpeakers:From the EMEA Infrastructure Finance team:
• Neil Griffiths-Lambeth, Associate Managing Director (moderator)
• Stefanie Voelz. Vice President-Senior Credit Officer
This discussion will last approximately 45 minutes and will include a Q&A session.
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