Thames Water’s creditors have increased the amount of their rescue bid to prevent the embattled utility firm from collapsing.
Britain’s biggest water company, serving around 16 million customers, is sitting on a mountain of debt of more than £20billion.
Its financial woes could push the Government to nationalise Thames Water if a long-term restructuring deal is not reached.
The utility giant said London & Valley Water – a consortium of its main creditors which include Aberdeen Investments, Elliott and Pimco – had proposed plans to inject £3.35billion of new equity and £6.55billion in new debt.
The bid, which was first reported over the weekend, is an increase on the offer made by the group last October, which included a £3.15billion equity injection and a £7.5billion debt write-off.
The deal also includes a commitment from the company’s largest shareholders not to sell a significant proportion of their equity investment until 2030. Thames will also be prevented from paying dividends until 2035.
Lifeline: Thames Water creditors have tabled an improved bid to prevent collapse
In December, Thames Water was scrambling to secure a last-ditch rescue, having already drawn down £1.43billion of a £1.5billion lifeline.
Thames Water said it had enough cash to last until early 2025, but if a deal was not approved, it could collapse into government-supervised administration.
Thames Water said LV&W’s improved proposal remains subject to review by the regulator and shareholders.
It said: ‘As engagement remains ongoing, there is no certainty that the L&VW Proposal will be accepted or that it will be finalised in its current form.
‘At this stage, the company’s board, Ofwat, other regulators and relevant investment committees have made no decision to accept and take forward the L&VW Proposal to implementation.’
Thames Water, whose customers saw annual bills rocket from an average of £488 to £639 earlier this year, is also facing fines totalling more than £100million for pollution failures.
LV&W said bills would remain in line with expectations but any eventual sale above agreed levels ‘would see certain benefits of the turnaround shared with customers’.
The consortium also said it would pay all outstanding fines as part of its plan.
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