Thames Water in talks with creditors for 1 billion pound lifeline, says source

reuters_tickers

LONDON (Reuters) – Thames Water is in talks with a group of creditors to secure an interim liquidity facility of around 1 billion pounds ($1.33 billion) to stabilise its finances ahead of debt restructuring discussions, a source familiar with the matter said on Monday.

Holders of approximately 10 billion pounds of Thames Water’s debt are in talks with the utility to offer short term financial support, the source said.

The structure and final amount are still under negotiation, with any potential deal subject to positive feedback from water services regulator Ofwat on the draft determination, an acceleration of the final determination by the regulator and a viable business plan, the source added.

Thames Water declined to comment.

The news was first reported by The Sunday Times, which said that the financial lifeline would likely take the form of loans or bonds with ‘super senior status’, carrying a high-interest rate.

Britain’s largest water company, with a net debt of £16 billion ($21.8 billion), said on Friday it was in discussions with creditors about securing funds to maintain operations for the next few months while it seeks to raise the capital necessary for its survival.

The utility company, which provides water to a quarter of the UK population, has stated it needs to raise equity of 3.25 billion pounds over the next five years.

Without this new investment, the company warned it would run out of money by May 2025.

($1 = 0.7520 pounds)