Britain’s Thames Water seeks £2.4 billion more emergency funding

LONDON: Britain's Thames Water announced on Thursday that it plans to increase its emergency funding facility by £2.4 billion to reach a total of £5.4 billion. This move aims to ensure the company can continue operating until late 2027. So far, Thames Water has utilized £2.65 billion of its existing £3 billion lifeline, with funds expected to run out by the end of this year or early 2027, according to the utility's latest forecasts.

The company, burdened with approximately £20 billion in debt, has been struggling to survive due to years of insufficient investment in its aging infrastructure. Thames Water's senior creditors are pushing for a rescue deal, which could involve debt writedowns and equity investment, to prevent the utility from falling under temporary government control.

A creditor consortium named London & Valley Water recently proposed a group of directors to oversee a decade-long overhaul if their rescue plan is approved. Thames Water stated that it will seek commitments to increase its emergency funding in multiple tranches over the coming months, extending liquidity until autumn 2027. This funding will enable the company to continue its capital program and deliver improvements in customer service and environmental impact.

To facilitate this increase, a new subsidiary of the existing facility's super senior debt issuer will be established to provide the additional funds. Creditors have until October 29 to vote on changes to the facility's rules and to waive outstanding conditions, allowing Thames Water to draw an extra £350 million from its current facility.

This is the 16th consent request made to creditors, all of which have been approved by the company so far. Thames Water emphasized its ongoing collaboration with stakeholders to secure a market-driven solution.