Thames Water says it will run out of cash in March as it scrambles to avoid a taxpayer bailout
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Thames Water has revealed it only has enough cash to survive until March. Britain’s biggest water supplier is scrambling to avoid a taxpayer bailout amid mounting losses and debts. The group is gearing up for a crunch week in its desperate bid to secure a £3billion rescue package from its creditors.
And regulator Ofwat will also rule next week on whether the debt-laden firm can hike customer bills by 59 per cent over the next five years. Boss Chris Weston yesterday said Ofwat’s decision, due to be published on Thursday next week, was ‘fundamental’ to the struggling firm’s future as it seeks a new owner.
He dismissed calls for an immediate break-up of the company, saying he was confident that Thames Water would receive a £3billion loan from its creditors. Deep water: Thames water is gearing up for a crunch week in its desperate bid to secure a £3bn rescue package from its creditors.
The loan – agreed by more than three quarters of its top-ranking creditors – is subject to its first court hearing on Tuesday next week, with a second date scheduled for January. Not all lenders have agreed to the rescue package, with some junior creditors refusing to back the plan.
Without the funding, which will be paid in instalments, Thames Water only has enough money to survive until March. That has reignited concerns that the supplier may need to be rescued by the Government in a process known as a special administration. The loan, which will charge an interest rate of 9.75 per cent – far above market rates – would allow the company to continue operating until May 2026, by which time it expects to have completed its search for a new owner.
