Yorkshire Water has received an “unequivocal vote” of approval from its bondholders to close its three Cayman Islands subsidiaries.

More than 98 per cent of its bondholders and 100 per cent of US Private Placement (USPP) noteholders voted in favour of the changes required to close the offshore companies.

The result means £3 billion of bonds and USPP notes can be transferred into a new UK incorporated company, which is expected to take place in July.

Yorkshire Water announced its intention to close its Cayman Islands subsidiaries in October 2017, in a bid to address the water industry’s legitimacy challenge.

Liz Barber, director of finance, markets and regulation at Yorkshire Water, said: “This strong support from bondholders means that we can immediately press ahead in transferring the bonds to the UK and improve the transparency of our financial structure.

“As the first company to announce back in October last year that we would close our Cayman Islands subsidiaries we are delighted to be able to deliver on this commitment.”

The water company said the vote followed an “intensive preparation and engagement” period with all bondholders.

Kelda Group, Yorkshire Water’s parent company, will liquidate the Cayman Island companies once the bonds have transferred to the UK.

The Cayman companies were created for “technical reasons” due to the financial structure of the Kelda Group, Yorkshire Water said.

The company insists: “They have always been managed from the UK and UK resident for tax purposes.”

Anglian Water removed its Cayman Islands company from its financial structure earlier this month, in just under three months after it revealed plans to “speed up” the removal.

Thames Water and Southern Water are in the process of winding up their offshore financial structures.

Environment secretary Michael Gove accused the four water companies of making “particularly keen use of sophisticated financial engineering” when he gave a keynote speech at Water UK’s conference on 1 March.

The Department for Environment, Food and Rural Affairs has since welcomed the action from water companies.

A spokesperson said: “The government expects water companies to work as diligently for customers and the environment as for their investors. We welcome the action that the four water companies have taken to close their Cayman Island subsidiaries.”

In April, Ofwat’s chairman Jonson Cox set out a programme of reform to bring the water sector “back in balance” and rebuild public trust.

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