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Thames Water is facing crunch talks over its finances amid mounting concerns about its ability to service a debt mountain which stands at more than £14bn.
Sky News has learnt that Thames Water, which is privately owned and employs about 7,000 people, has in the last few weeks hired Rothschild, the investment bank, and the law firm Slaughter & May to explore financing options for the company.
The appointment of the advisers has taken place against a backdrop of growing public and political fury about the company’s dire record at preventing leaks and raw sewage discharges.
Thames Water serves nearly a quarter of Britain’s population, with 15m customers across London and the Thames Valley.
Industry sources said the government and Ofwat, the industry regulator, were aware of growing concerns about its financial position.
A Thames Water spokesperson said: “It’s normal course of business to appoint advisors to support the funding of our investment programme.”
Sarah Bentley, who joined as chief executive in 2020, is overseeing an eight-year plan to transform the company’s operating and financial performance.
Ms Bentley recently declared that she was “heartbroken” about the company’s historical failings, blaming “decades of underinvestment”.
It has been fined numerous times, and is facing a deluge of regulatory probes.
In 2021, it was hit with a £4m penalty for allowing untreated sewage to escape into a river and park, while in August 2021, it was ordered to pay £11m for overcharging thousands of customers.
The range of financing options to Thames Water’s board – which is chaired by the former SSE chief Ian Marchant – beyond seeking new equity investors or attempting to raise additional debt was unclear this weekend.
Nearly £1.4bn of the company’s bonds mature by the end of next year, with Ofwat price controls meaning water companies have little scope to generate additional income.
In an investor update published last September, Ms Bentley said…
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