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Thames Water Creditors Plan New Financial Backing to Stabilize Utility
Creditors Prepare Rescue Plan for Thames Water
Fresh Financial Backing and Debt Details
July 8 (Reuters) – Creditors seeking to take control of Thames Water are preparing to provide fresh financial backing to the debt-laden utility, Sky News reported on Wednesday, citing sources.
• The lenders, who hold a majority of Thames Water’s roughly £20 billion ($26.81 billion) of debt, plan to state that they will provide additional funding over the next 12 months, according to the report.
Auditor Opinion and Annual Results Timeline
• The move comes as Thames Water seeks a going-concern opinion from its auditor ahead of a July 15 accounts deadline, Sky News said, adding that the company plans to publish its annual results next week.
Comfort Letter and Equity Injection
• The creditors will provide Thames Water with a “comfort letter” ahead of the accounts filing, Sky News said.
• The proposal would inject £3.35 billion of equity and £3.5 billion of debt into Britain’s largest water supplier, Sky News added.
Dividend Commitment and Verification
• The plan also includes a commitment not to pay dividends until the 2030s, the report added.
• Reuters could not immediately verify the report. Thames Water and Ofwat did not immediately respond to Reuters’ requests for comment outside regular business hours.
Previous Rescue Proposals and Government Response
• Senior creditors had proposed a multibillion-pound rescue package to stabilise the company, Reuters has reported previously.
• Last month, Britain’s government rejected a £10 billion rescue proposal for Thames Water, increasing the likelihood of temporary nationalisation if a turnaround deal fails.
Exchange Rate Information
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Reporting Credits
(Reporting by Bipasha Dey in Bengaluru; Editing by Tasim Zahid)