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Shareholders have backed out of plans to inject the first £500m of funding into troubled utility Thames Water as industry regulations make its business plan “uninvestable”.
Thames Water – the UK’s biggest water supplier with 15 million households across London and the South East – said the funding plan drawn up last July was subject to conditions, including a business plan that is supported by “appropriate regulatory arrangements”.
The company has been battling to secure its future since last summer, with a funding crisis leaving the debt-laden firm on the brink of emergency nationalisation.
Last summer, a rescue funding plan was agreed with shareholders, including a Canadian pension fund and China’s sovereign wealth fund, that would see them pump in £750 million, with the first £500 million due by the end of this month.
But it is understood that Ofwat has refused to bow to the water giant’s demands for concessions, said to include a 40% bill hike for customers, an easing of capital spending requirements as well as leniency on regulatory penalties.
Chris Weston, chief executive of Thames Water, said: “I’d like to reassure our customers that, despite this announcement, it is business as usual for Thames Water.
“Our 8,000 staff remain committed to working with our partners in the supply chain to provide our services for the benefit of our customers, communities and the environment.”
More follows on this breaking news…