Britain’s Thames Water sees financial crisis worsen

Britain’s Thames Water sees financial crisis worsen

Debt-plagued 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”.

The Business Standard also reported on the news on Thursday.

Britain’s biggest water supplier said in a statement that £500 million 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 £750 million 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 percent jump in water bills that would worsen the country’s cost-of-living 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.

“Today’s update… means the company must now pursue all options to seek further equity for the business to turn around the performance of the company for customers.”

Thames Water supplies 15 million homes

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.

The group has also faced fierce criticism over missing targets to reduce leaks and slash sewage discharges into rivers, despite major infrastructure investment.

A record number of storm drains overflowed with sewage last year in England, official statistics showed on Wednesday, angering campaigners wanting cleaner rivers and seas.

Environmentalists have increasingly voiced outrage at the rise in pollution on the UK’s beaches and waterways, and have pointed the finger at privatised water companies.

Meanwhile, this year’s Oxford-Cambridge Boat Race will take place on the River Thames this weekend.

By Garrin Lambley © Agence France-Presse