Britain’s Thames Water said its equity raise was progressing, the next stage of a rescue plan after it secures a £3-billion ($3.83-billion) facility to help it survive into the new year, as it published half-year results.
The water supplier, the country’s biggest, has close to £18-billion of debt and is fast running out of cash after its current owners refused to stump up new money earlier in the year, putting the government on standby for nationalization.
Chief Executive Chris Weston said the company was making progress with its turnaround plan and its posted an improvement in profit, but its environmental performance was worse.
“We’ve reached key milestones in establishing a more stable financial platform, agreeing a liquidity extension transaction proposal and progressing our equity raise process,” he said on Tuesday.
While the £3-billion lifeline offered to Thames by a group of creditors in October will temporarily stabilize its finances, its long-term future depends on it securing new equity and restructuring its debt.
A competitive process is under way aimed at raising the £3.25-billion of equity Thames Water needs to fund investments to 2030. British financial investor Covalis Capital and France’s Suez Group are amongst the bidders.
For the six months to the end of September, Thames Water posted underlying earnings (EBITDA) of £715-million, up 14 per cent partly a result of better cost discipline.
On the worsening environmental performance, it blamed record rainfall for a 40 per cent rise in total spills.