Ofwat calls on water services to restrict payments to shareholders

(Reuters) – The UK water regulator decided on Tuesday to restrict some payments to shareholders by the water utilities, as part of an offer to protect investment flows in the sector.

The Water Services Regulatory Office (Ofwat) has stated that if a public water management company risks losing its investment grade rating, it will be prohibited from making payments to shareholders or withdrawing money or badets of the company.

"These changes are intended to further protect the interests of customers by ensuring that water companies retain their financial strength and continue to attract investment," Ofwat said in a statement.

The regulator's calls come as water services face the threat of renationalization if the ruling British Labor Party comes to power in accordance with the party's more than 100-year plans.

Severn Trent <SVT.L> reported that state property could increase customer bills and reduce investment, while rival, United Utilities has described this possibility as a "key uncertainty zone" in its annual report.

Ofwat's new measures, released on Tuesday, also include strengthening obligations of water distribution services in order to maintain an investment-grade credit rating, the regulator added http: //pdf.reuters. com / htmlnews / htmlnews.asp? i = 43059c3bf0e37541 & u = urn: newsml: reuters.com: 20190709: nrSI8679Ea.

(Report by Muvija M in Bengaluru, edited by Arun Koyyur, edited by Jan Harvey)