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Thames Water said on Tuesday that its efforts to raise new equity were progressing, after the UK’s biggest water utility secured a £3bn loan from creditors that will help it avoid a cash crunch this year.
Chris Weston, chief executive, said the company had “reached key milestones in establishing a more stable financial platform, agreeing a liquidity extension transaction proposal and progressing our equity raise process”.
The utility, which has been straining under a £19bn debt burden, is trying to avoid being renationalised under the government’s special administration scheme.
Last month, more than three-quarters of its top-ranking creditors agreed to lend it £3bn, in a move that averts a cash crunch this year. The deal is expected to be signed off in court next week.
Thames Water, which has 16mn customers in London and surrounding areas, is also seeking to raise at least £3bn of equity from investors.
Potential new investors are awaiting a decision by industry regulator Ofwat this month on the extent to which Thames will be allowed to raise customer bills — a move the utility has said is needed to help fund an overhaul of its ageing infrastructure.
The slow-burning crisis at the group accelerated in March when its existing shareholders, made up of pension funds and sovereign wealth funds, declared the business “uninvestable” and balked at injecting new money.
https://www.ft.com/content/28215965-cb4d-4c7b-8e84-98653923f8c3
