Government strikes to reassure Thames Water prospects as collapse fears mount
T
he Government has insisted work is occurring “behind the scenes” to make sure that prospects of debt-laden Thames Water “will not be impacted” following reviews that the corporate is on the verge of going bust.
The utility big is looking for to boost money from buyers because it struggles below a £14 billion debt pile, with the Government stated to be drawing up contingency plans for the agency’s emergency nationalisation.
Business Secretary Kemi Badenoch stated she was “very concerned” in regards to the disclosures however that efforts have to be made to verify the corporate “survives”.
Environment minister Rebecca Pow moved to reassure Thames Water’s 15 million prospects that their water provides might be protected.
She instructed the Commons: “Overall the water companies are considered resilient, but there is a lot of work going on behind the scenes with Thames Water to ensure that customers will not be impacted.
“And there is a process in place if necessary to move us to the next stage.”
She added: “Customers should rest assured that their supplies will be protected, both water and waste water.”
Speaking to Sky News later, Ms Badenoch stated: “I’m very concerned. Obviously this is a commercially sensitive situation.
Customers should rest assured that their supplies will be protected, both water and waste water
“We need to make sure that Thames Water as an entity survives.
“At the moment, or certainly up until now, the regulator has been focused on keeping consumer bills down, but there’s a lot of infrastructure work that needs to take place and we need that entity to survive and continue going.”
A spokesman for the Government earlier stated it prepares for a “range of scenarios” in regulated sectors, such because the water trade.
Thames Water is the UK’s greatest water provider, serving folks throughout London and the South East.
Ministers are stated to be in talks about the potential of quickly bringing the utility firm again into public palms below a so-called particular administration regime (SAR), which was the insolvency course of used when vitality provider Bulb collapsed in 2021.
An SAR is used solely in excessive circumstances when an organization in an important sector comparable to water or vitality is just too large to fail.
Thames Water has confirmed it’s working with shareholders to safe the money it wants.
The firm stated it wants “further equity funding” on prime of the £500 thousands and thousands it raised simply three months in the past, and is protecting trade regulator Ofwat “fully informed”.
The enterprise stated in an announcement that it’s “continuing to work constructively with its shareholders in relation to the further equity funding expected to be required to support Thames Water’s turnaround and investment plans”.
Ofwat, the Department for Environment, Food and Rural Affairs (Defra) and the Treasury are understood to be engaged on the contingency plans for Thames Water.
Ofwat confirmed it’s in talks with Thames Water about growing a “robust and credible plan to turn the business around and transform its performance for customers and the environment”.
On Tuesday, Thames Water chief govt Sarah Bentley stepped down with rapid impact amid mounting worries over the monetary stability of the corporate.
The agency is now reportedly racing to boost £1 billion from buyers to shore up its funds, with AlixPartners stated to be advising the agency on turnaround plans.
Thames Water – owned by a consortium of pension funds and sovereign wealth funds – has come below strain lately over its poor efficiency in tackling leaks and sewage contamination, whereas dealing with criticism for handing out large rewards to prime bosses and shareholders.
Ms Bentley, who was appointed in 2020, stated in May that she would surrender her bonus after the corporate’s environmental and buyer efficiency suffered, however nonetheless managed to double her pay, raking in £1.5 million.
The group’s shareholders embrace Chinese sovereign wealth fund China Investment Corporation, UK non-public pension fund the Universities Superannuation Scheme, and Abu Dhabi Investment Authority subsidiary Infinity Investments.