A group of Thames Water creditors has put forward a new rescue deal for the struggling supplier pledging an extra £1bn in investment and plans to write off around a third of the firm’s near-£20bn debt pile.
London & Valley Water – a consortium of the supplier’s main creditors including investors and financial institutions – said its offer was “more ambitious, delivers greater value for customers and follows three months of discussion with and feedback from Ofwat” to help turn around Thames Water.
It said the funding, on top of the proposal submitted in May, would “ensure long-term financial resilience” and cover existing fines Thames Water must pay for regulatory and pollution failures.
Thames Water covers a large area of London and the Thames Valley as well as Oxfordshire, Berkshire, Wiltshire and Gloucestershire. The company slumped to a £1.65bn annual loss in July and is is on the brink of nationalisation as it struggles under a mountain of debts.
The creditors are looking to secure backing for their plans to avoid Thames Water being put into a temporary special administration regime (SAR), which would effectively wipe out their investments.
Thames Water remains in discussions over the bid, but any agreement would be subject to high court approval.
Chris Weston, chief executive of Thames Water, said: “Today is an important milestone in our ongoing work with creditors and stakeholders to secure a market-led recapitalisation that establishes the financial and regulatory foundations required to support the investment and performance improvements our customers expect.”
