Widespread media reports over the Easter weekend are suggesting that Thames Water is on the brink of collapse, following the refusal of its investors to put more money into the company.
According to a report in yesterday’s Financial Times, the company’s owners are beginning “urgent restructuring talks”, bringing in restructuring experts Alvarex & Marsal, while parent company Kemble “dices with insolvency.”
An article in The Times this morning headlined “Thames Water in last-ditch talks to avoid sinking into insolvency” suggest that the water company is “set to enter last-gasp talks ….as its owners try to stave off the threat of insolvency.”
The Guardian reported yesterday that the company’s nine investors had refused to secure short-term cashflow with parent company Kemble shortly due to make a £190 million loan repayment.
According to The Guardian, the water company is also “understood to have appointed experts at Teneo, the adviser that managed the collapse of Bulb Energy.”
“Thames is also continuing to work with advisers at Rothschild to explore potential financing options for the company,” the article says.
A separate story in City.am yesterday said urgent restructuring talks would reportedly start in the coming days as “the embattled firm’s parent company Kemble risks entering insolvency within weeks unless lenders agree to a debt-for-equity deal.”
Thames Water itself has made no further comment since it issued an update on shareholder funding last Thursday in which the company said it has liquidity of £2.4 billion of cash and available committed facilities, as at 29 February 2024.
Chris Weston, CEO of Thames Water said in the update:
‘I’d like to reassure our customers that, despite this announcement, it is business as usual for Thames Water. Our 8,000 staff remain committed to working with our partners in the supply chain to provide our services for the benefit of our customers, communities and the environment.’
To date water sector regulator Ofwat has made no comment on the latest news reports. Last week Ofwat issued a statement saying that safeguards are in place to ensure that services to customers are protected regardless of issues faced by shareholders of Thames Water and that the company "must now pursue all options to seek further equity for the business to turn around the performance of the company for customers."
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