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.
Weston said he was ‘very comfortable’ with the level of interest shown by potential equity bidders.
A £5billion proposal put forward by Covalis and French utility group Suez would see the embattled utility broken up, with the rump listed on London’s stock market.
It could see the company hive off entire regions such as the Thames Valley.
Meanwhile, a separate bid from Castle Water, a firm co-owned by Conservative party treasurer Graham Edwards, would pump around £4billion into Thames Water in return for a majority stake, with a plan for a listing within three years.
Other potential bidders for the debt-laden utility business include Hong Kong-based firm CK Infrastructure Holdings, which owns Northumbrian Water.
The chief executive declined to say if the company had received any additional offers. ‘They are credible parties and we will continue to work with them,’ Weston said.
But Sharon Graham, general secretary of union Unite, said ‘corporate vultures’ are ‘looking to asset strip’.
Final offers will be submitted in January after Ofwat’s ruling on bill increases.
If Thames Water disagrees with Ofwat’s findings, it has two months to launch an appeal with the Competition and Markets Authority (CMA).
The watchdog would then have between six and 12 months to issue a decision.
Net debt hit £15.8billion during the six months to the end of September, up from £14.7billion a year earlier, according to Thames Water’s latest accounts.
The company recorded a £189.7million loss, compared to a profit of £172.3million in 2023.
Thames Water blamed the swing into the red on £426.7million of one-off ‘exceptional items’, including around £51million handed over to advisors as it sought to secure an emergency funding package.
Weston, who joined the company in January, said: ‘In the last six months we’ve made solid progress on the transformation and turnaround of Thames Water.
‘We’ve reached key milestones in establishing a more stable financial platform, agreeing a liquidity extension transaction proposal and progressing our equity raise process.
‘The next critical step is receiving an investable final determination, which is fundamental to our future.’
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