Financial crisis at U.K.’s biggest water supplier worsens
Thames Water is saddled with debts of almost £15 billion that have placed it at risk of nationalisation.
Debtplagued Thames Water revealed on Thursday that it failed to raise a major cash injection from shareholders, blaming industry regulations that made its rescue plan “uninvestable”.
Britain’s biggest water supplier said in a statement that £500 million ($630million) of new equity will “not be provided by Thames Water’s shareholders” this month. The company added it was in “ongoing” talks with industry regulator Ofwat over a plan that is “affordable for customers, deliverable and financeable for Thames Water, as well as investible for equity investors”.
The cash represented most of a £750million funding lifeline that had been previously agreed with investors last July to stay afloat.
Britain’s Press Association newswire reported Ofwat had refused to bow to Thames Water’s demands for concessions, which it said included a 40% jump in water bills that would worsen the country’s costofliving crisis. Other concessions would reportedly include an easing in capital spending requirements and leniency over regulatory penalties.
In a separate statement, Ofwat said Thames Water needed to seek other solutions for its finances, but stressed that customers would be unaffected. “Safeguards are in place to ensure that services to customers are protected regardless of issues faced by shareholders of Thames Water,” said an Ofwat spokesperson.
Thames Water, which supplies more than 15 million homes and businesses in London and elsewhere in southern England, is saddled with debts of almost £15 billion that have placed it at risk of nationalisation.