UK utility giant Thames Water will seek fresh funding to keep business afloat
Britain's largest utility company Thames Water says it will seek fresh funding to keep the business afloat even as it warned it would run out of money by the end of May
LONDON -- Thames Water, Britain's largest water company, said Tuesday it's hunting for fresh funding to keep the business afloat, even as the heavily indebted company warned it would run out of money by the end of May.
The company, which is burdened by some 15 billion pounds ($19 billion) in debt, has been locked in a dispute with regulator Ofwat regarding how high bills can be increased by 2030 to pay for critical repairs to infrastructure. Its financial update Tuesday comes only days before Ofwat offers a draft verdict on its five-year spending plans.
Thames Water provides water and sewage services to some 16 million customers in London and the Thames Valley region. It has spent the past year fighting to avoid being taken over by the government.
“Thames Water is keeping afloat, but its emergency life buoy is deflating as efforts to raise funds from shareholders proves elusive,’’ said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
“It can still tap funding of around 1.8 billion pounds, until spring next year, but it’s a reservoir that’s been shrinking. At the same time, its debt pile is an even bigger millstone and risks pulling the business under," Streeter said.
The release of Ofwat's report will kick off six months of negotiations ahead of its final decision in December.
Thames Water Chief Executive Chris Weston said “informal soundings'' show there is interest in the market.