Britain’s Thames Water seeks £2.4 billion more emergency funding

Thames Water said it would seek commitments to increase its emergency funding in tranches over the coming months. (EPA Images pic) LONDON: Britain's Thames Water said on Thursday it needed to increase its emergency funding facility by £2.4 billion to £5.4 billion, to keep operating into autumn 2027.

Thames Water said it had already drawn £2.65 billion of its existing £3 billion lifeline and, under its latest forecasts, would run out of money by the end of this year or early 2027, before its planned recapitalisation is completed.

The utility, saddled with about £20 billion in debt, has been fighting for survival after years of inadequate investment in its ageing infrastructure.

Its senior creditors are seeking a rescue deal involving debt writedowns and equity investment in an effort to avert temporary government control.

The creditor consortium, known as London & Valley Water, named a group of proposed directors in August to oversee a decade-long overhaul if its rescue plan is approved.

Thames Water said it would seek commitments to increase its emergency funding in tranches over the coming months.

The increase would extend the company's liquidity into autumn 2027 and allow it to continue its capital programme and deliver improvements for customers and the environment, it said.

A new entity, a subsidiary of the issuer of the existing facility's super senior debt, would be created to lend the money. The arrangement would require waivers of some existing borrowing conditions, the company said.

Creditors have until Oct 29 to vote on changes to the rules governing the facility's increase and to waive outstanding conditions to allow Thames Water to draw a further £350 million of its existing facility.

The vote is the 16th set of consent requests put to creditors, who have approved the previous 15.

Thames Water said it continued "to work closely with stakeholders to secure a market-led solution".