Water takes on a new liquidity

When Glas Cymru won approval from Ofwat to restructure Welsh Water, it introduced a new model for privatized UK utilities that does away with conventional shareholders. Glas will break new ground by financing its purchase entirely through a securitization. But despite the problems caused by shareholders taking cash out of the industry that the regulator wants to go to customers, many water companies argue that equity still has a role to play in their funding structure. Steve Metcalfe reports on a debate that could force the restructuring of an entire sector and might yield lessons for other utilities