Thames Water rescuers seek clean break before committing fresh funds
Thames Water rescuers seek clean break before committing fresh funds
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Exclusive: Some bidders demand temporary renationalisation to help cut debts and oust bosses. Thames Water’s potential rescuers are seeking a clean break with the company’s past before they commit fresh funds, with some demanding a temporary renationalisation to help cut debts and replace bosses, the Guardian can reveal.
There has been public outrage at the governance of England’s water industry amid sewage spills into rivers and seas, mounting corporate debts and rising consumer bills. New investors in Thames have a deadline of 10 February to submit bids, sources said. Four groups are expected to make offers, the Guardian understands. However, their fresh equity comes with a condition of steep losses for Thames’ creditors, according to sources familiar with the proposals.
Sources with detailed knowledge of two of the bids said they were considering making it a requirement that the UK’s largest water company go through a form of temporary nationalisation known as a special administration regime (SAR) to ratchet down its £19bn debt pile and oust senior management.
One bid has already made this a condition to ensure a “clean slate” and avoid shouldering the risk of historic financial agreements, a source said. The supplier, which serves 16 million customers in London and south-east England, could run out of cash as soon as the end of March if it does not secure £3bn in emergency funding through an agreement with its creditors. This deal needs court approval with a hearing scheduled for 6 February. The utility has also said it would need at least £3.25bn in new equity funding.
