Thames Water parent firm fails to pay interest on its debts
THE PARENT company of Thames Water says it failed to meet a deadline to pay interest on its debts.
Kemble Water was due to make the payment on a £400 million debt on Tuesday, April 2.
Instead, it says it is exploring its options, and is asking lenders to take no action.
The firm also has a £190 million loan due to be repaid by the end of the month. Kemble is to ask lenders for an extension to its repayment terms.
Reuters reports that Kemble and Thames Water have a combined debt of £16 billion.
Kemble took on Thames Water in 2006.
The firm has been under troubled waters for some time.
In July last year, Thames Water said its shareholders agreed to provide a further £750 million in new equity funding with the first £500 million tranche of which was anticipated by March 31, subject to certain conditions being met.
These included the preparation of a business plan that underpinned a more focused turnaround with performance improvements for customers, the environment and other stakeholders over the next three years.
However, Thames Waters said the conditions of the support letter from July 2023 have not been satisfied and the first £500 million of the new equity that had been anticipated was not provided.
On March 28, Chris Weston, CEO of Thames Water, said the company has liquidity of £2.4 billion of cash and available committed facilities, as at February 29.
“I’d like to reassure our customers that, despite this announcement, it is business as usual for Thames Water,” he said. “Our 8,000 staff remain committed to working with our partners in the supply chain to provide our services for the benefit of our customers, communities and the environment.”
In October last year, the Readingbased firm said it was embarking on a £4.7 billion investment in its network.
Cathryn Ross and Alastair Cochran, the then interim co-CEOs of Thames Water said: “Our plan prioritises storm overflows, bathing water status and reducing leaks and pollutions. In parallel, we will do more than ever to support customers by introducing an improved social tariff for those who struggle to pay their bills.”
The financing of the £18.7 billion package would come from a totex programme.
They also wanted to increase customer bills.
“To deliver water security and environmental improvements, our bills will need to rise but also be affordable,” the duo said.
This action has support from Wokingham MP Sir John Redwood, who wrote on his blog: “As most want faster progress with expanding capacity of our dirty water pipes there needs to be an increase in spend and in customer contribution. If we want more and better sewers then either customers or taxpayers have to pay more.”