Thames Water creditors warned today of a “very short and closing window” for talks to succeed to prevent the utility falling into administration.
A group of more than 100 creditors holding a total around £13 billion of Thames Water debt issued their statement the day after New York private equity giant KKR pulled out of talks about leading a rescue bid.
London’s water supplier is saddled with almost £20 billion of borrowings in total and is urgently seeking a “market led” recapitalisation that will allow the company to remain operating in the private sector.
Without a deal to stabilise Thames Water’s creaking balance sheet the supplier to 16 million customers across London and much of the south east will probably have to be nationalised through a “special administration” process.
It is hoped that talks with regulator Ofwat will be in July, with implementation expected to begin in the Autumn.
A spokesperson for the creditor group said: “The Creditors have submitted a detailed long-term turnaround plan that will fix the root causes of Thames Water’s problems, restore its balance sheet, rebuild customer trust and fix the fundamentals of the business once and for all.
“The plan will break from the patterns of the past by delivering customers’ priorities and improved outcomes for the environment in the shortest possible timeframe.
“The comprehensive recapitalisation proposal, which is fully-funded and targets a sustainable capital structure, will deliver substantial fresh investment to drive significant change under a new, highly experienced and accountable leadership team.
“The Creditors include some of the largest investors in UK water companies, as well as UK and global infrastructure more broadly, with a proven track record of long-term stewardship.
“These investors have the funding and experience required to deliver a transformation of the Company’s performance which marks a departure from past failings, creating a ‘new’ Thames Water that works effectively alongside Government and regulators to deliver for the environment and economic growth.
“The creditors believe that Thames Water requires an urgent and fundamental reset and there is a very short and closing window in which a market-led solution can succeed. Discussions with Ofwat and the Government will be advanced in the coming weeks to reach an agreement and turnaround for the benefit of customers and the environment.”
