In an unprecedented move, British regulators have placed the country’s largest water utility under “special measures” as its finances deteriorate rapidly and a search for new investment capital is underway.
Regulator Ofwat has announced that Thames Water will come under increasing scrutiny and must review its plans to improve its operational performance and resilience. It approved spending of £16.9 billion of the company, which will aim to improve customer service and protect the environment. The value is lower than £19.8 billion that the company had requested.
At the same time, the license was granted to Thames Water increase customer bills by an average of £99 per yearfor the next 5 years. She asked permission an increase of almost £200 per year. Being under special measures means that he will be under close supervision.
The company said in a statement that its proposed spending and accounts aimed to maintain a “reliable supply of safe, high-quality drinking water” in London and other areas it covers. It disputed Ofwat’s view that its business plan was “inadequate” and added that it would provide further evidence to the regulator to support its initial proposals. The authority’s final verdict is due in December 2024.
16 million customers
The company has more than 16 million customers and is trying to avoid solutions such as temporary nationalization or division into smaller units. A few months ago, its shareholders rejected a £500 million capital injection proposalwhile her mother Kamble declared bankruptcy.
Thames Water is owned by a consortium of institutional investors, including pension funds and private equity. Its largest foreign shareholder is the Ontario Municipal Employees Retirement System, one of the largest pension funds in Canada.
And over 15 billion in debt
The company’s arrears have mounted over the past two decades and on Wednesday it announced it was saddled with £15.2bn of net debt for the financial year ending March 2024. It reckons it will not run out of cash until the end of May 2025, assuming it can continue to draw on revolving credit facilities and use all cash resources.