Thames Water creditors present £17 billion rescue plan amid crisis
- A consortium of Thames Water's creditors has proposed a £17 billion rescue plan to Ofwat, aiming to stabilize the financial situation of the utility.
- The proposal includes £3 billion in new equity and the writing off of several billion pounds in debt, stressing the need for leniency in regulatory performance targets.
- Without a regulatory reset, the situation at Thames Water may worsen, threatening their ability to manage pollution and maintain customer satisfaction.
In the United Kingdom, a group of creditors for Thames Water has put forth a comprehensive multibillion-pound rescue proposal for the troubled utility company. This plan was submitted to the regulatory body Ofwat and involves major investment firms like Aberdeen, Elliott Management, and BlackRock. They are offering £3 billion in new equity and an additional £2 billion in funding, as well as writing off several billion pounds' worth of existing debt. The creditors have expressed concerns that without regulatory leniency on performance targets, Thames Water may continue to decline in terms of pollution control, asset health, and customer service levels. This announcement comes in the wake of US private equity firm KKR withdrawing its support for a rescue deal aimed at injecting essential funds into Thames Water. Compounding these issues, Thames Water is grappling with an astronomical £19 billion in debt during a period where it services approximately 16 million customers. The proposed plan is significant as it would be the largest financial loss encountered by investors in a British infrastructure asset, resulting in a complete loss for existing shareholders, according to the creditors. They argue that a