The news source quoted independent investment bank, Reynolds Partners, as saying that some UK utilities are in a highly leveraged position and could find it tough to fund operations in case of emergencies.
The UK energy regulator Ofgem has also expressed its concern over the looming credit crunch issue, by saying that though it can offer protection to customers in case of a utility going bust, it will not be in a position to bailout the company itself.
The news source observed that utilities are becoming a prime target for leveraged buyouts as they offer a secure line of cash flow against which buyers can raise debt.
Industry analysts are of the opinion that utility regulators have been lax on determining the actual credit-worthiness of debt-ridden utilities, instead putting too much faith in independent credit rating agencies.
