- Written by Simon Jack & Karen Hoggan
- BBC news
Thames Water is racing to find extra cash after investors said they would not give the troubled water giant more cash unless its bills rose.
Britain's biggest water company is asking regulator Ofwat to agree to significant increases in water prices over the next five years.
People close to Ofwat say the company intends to “stick to its policies” and has no plans to introduce legislation to address shareholder issues.
Concerns arose last year that the Thames would collapse due to huge debts.
Last summer, the owners developed a turnaround plan that would raise bills by 40% over the next five years. But it is now believed that shareholders may want even higher bills as a condition for an injection of additional capital.
Investors had planned to spend around £4bn into the business over the next two years, but they suspended the first payment due at the end of March, saying the turnaround plan was “uninvestable”.
The government has previously said it is prepared to take over Thames Water, Britain's largest water company, if it goes bankrupt. He serves 15 million households, mainly across London and parts of the south of England.
The regulator has argued that even without additional capital, Thames Water Operator generates enough cash to continue operating on a day-to-day basis for up to 18 months, so there is no need to nationalize it immediately. .
However, at some point Thames will need to raise new funds to fund the huge investment program required, including domestic and international pension funds and wealth funds in China and Abu Dhabi. If current shareholders don't inject cash, it will need to raise new capital. – Thames will have to find something new.
Sources close to the current owners said few would consider Thames an attractive investment unless it could pay out profits.
“We would like to reassure our customers that business continues as normal,” Thames Water chief executive Chris Weston told the BBC.
He said the company was “far away” from being nationalized “at the moment”.
Finance Minister Jeremy Hunt said the shareholder's move “should not affect the service customers receive” and that the company was still solvent.
But he added: “There are underserved areas of the country, including my district.”
Thames Water is heavily in debt, with much of that debt pile growing when it was owned by Australian infrastructure bank Macquarie.
Interest payments on debt also skyrocketed.
Mr Macquarie said that while he owned the company, he had invested billions of pounds in improving the Thames' water and wastewater infrastructure.
But critics claim billions of pounds have been extracted from the company in loans and dividends (the portion of company profits paid to shareholders).
Like many UK water companies, Thames Water attracts attention by pumping sewage into rivers.
Between 2020 and the end of last year, we discharged at least 72 billion liters of sewage into the Thames.
Thames Water plans to “upgrade more than 250 sewage treatment facilities and sewers”, including the Tideway Tunnel supersewer to divert 34 of the most polluting sewage spills into the Thames. announced that it had been constructed.
Mr Ofwat said safeguards were in place to ensure services to customers were protected “irrespective of the challenges faced by Thames Water shareholders” and the department would “charge payers fairly”. said it was necessary to do so.
“We must now pursue all options for further capital for the business to turn around the company's performance for our customers. We also have to see that the company will be managed by the company.'' He added, “I look forward to it.''
