Thames Water's £20 Billion Debt Crisis: Creditors Step In With Rescue Plan
Thames Water, the UK's largest water company serving 16 million customers, faces a financial crisis. It has a debt pile of over £20 billion and has been hit with pollution fines totaling over £100 million. The company's future is uncertain, with the UK government ready to step in if necessary.
Creditors have stepped in to save Thames Water from state rescue. A consortium, led by the London & Valley Water consortium including Aberdeen Investments and Elliott, has proposed a restructuring plan. This involves writing off £7.5 billion of Thames Water's debt and injecting £3.15 billion in equity.
The consortium has committed to not paying dividends during the turnaround process and not selling Thames Water before March 2030. This plan aims to stabilize the company and improve its long-term performance, with the process expected to begin this autumn. However, the names of the new shareholders involved in this plan remain unknown.
Thames Water customers have seen their annual bills increase from £488 to £639 this year. The company's financial struggles and recent pollution failures have raised concerns about its future. The proposed restructuring plan by creditors offers a glimmer of hope, but the UK government stands ready to nationalize the company if the rescue effort fails.
