Thames Water Seeks Help From Advisors As Debt Crisis Escalates; Government Intervention Likely to Happen

By Thea Felicity

Apr 02, 2024 12:51 PM EDT

Thames Water Shareholders Deny Further Funding To Troubled Utility
LONDON, ENGLAND - MARCH 28: In this photo illustration, the Thames Water website is seen displayed on a screen beneath an annual water bill, on March 28, 2024 in London, England. Today, Thames Water shareholders, which includes a variety of pension funds and sovereign wealth funds, refused to inject emergency funding sought by the UK water regulator, Ofwat. The water utility's leadership said that if additional funding was not found by the end of 2025, the company could be placed in special administration, under which the government takes control.
(Photo : Photo by Leon Neal/Getty Images)

Thames Water has taken urgent steps to address concerns of collapse by assembling a team of financial experts for restructuring talks, per The Guardian. This is amidst mounting fears regarding its parent company's financial stability.

A report from VCPost indicates that investors have declined to invest additional funds into Thames Water to secure its short-term cash flow, prompting the company to seek assistance from City advisers, including Teneo and Rothschild, to explore potential financing options. 

This move comes after the parent company, Kemble Water Group, ceased emergency funding amid disputes with the industry regulator over proposed bill increases, which amount to over 40%.

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Thames Water's Debt: What Could Happen?

With over £18 billion ($19 billion) in debt and a looming £190m ($204 million) loan repayment deadline, concerns have intensified regarding Kemble's solvency, potentially leading to government intervention or special administration for Thames Water. 

"Now Thames Water customers are facing the worst of all worlds, with water bills set to skyrocket while local rivers are ruined by sewage. Ministers must step in before it's too late," said Sarah Olney MP, a spokesperson of the Liberal Democrat Treasury.

Despite Thames Water's reassurance of adequate cash reserves until 2025, uncertainties persist, prompting calls from politicians and campaigners for urgent action to safeguard customer interests and environmental concerns.

Thames Water and Kemble declined to provide further comments. The government and industry regulator, Ofwat, have also refrained from issuing statements on the matter.

READ MORE: Thames Water's Debt Crisis To Be Passed On To Customers With 40% Bill Hike

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