Britain’s biggest water supplier, Thames Water, said it was aiming to secure new equity in the coming months and was putting an attempt to raise customer bills by 53 per cent on hold while it works to secure the recapitalization.
Thames Water, which has for the past year been battling to stave off nationalization, has said it needs £3-billion ($3.9-billion) of new equity and to complete a debt restructuring to prevent its collapse in the future.
Past mismanagement has been blamed for its £18-billion debt pile and repeated sewage spills into rivers in London and surrounding areas, sparking a public backlash against Britain’s privatized water industry.
Thames Water said on Tuesday it was assessing proposals from six parties to raise equity, with the aim of agreeing a deal in the second quarter of this year and completing it in the third.
Aiming to attract new funds to improve its environmental performance, Thames has been fighting to raise bills by more than regulator Ofwat has allowed for the coming five years.
It said on Tuesday that Ofwat had agreed to put its appeal on hold for 18 weeks since the company now believed it could complete the recapitalization before finalizing future prices.
Thames Water said the deferral was not a withdrawal, and it maintains Ofwat’s proposed 35 per cent bill rise does not represent the best option for its 16 million customers or the environment. It wants bills to rise by 53 per cent.
The appeal process can take up to 12 months. Thames Water’s finances are secure until May 2026.
“We … look forward to working with Ofwat and our other stakeholders over the next few months to achieve our shared goal of a sustainable recapitalization of the company,” Thames Water Chairman Adrian Montague said in a statement.
Most of the equity proposals would involve senior creditors taking a material impairment, Thames Water said, in exchange for rights to share in the future growth of the company or the opportunity to co-invest. The proposals were also conditional on further regulatory support, it added.
Given there was no certainty of a deal being agreed, Thames Water said some senior creditors continued to work on “parallel alternative transaction structures”.