Thames Water creditors in talks with Ofwat for debt rescue plan

A creditor group has held a meeting with water watchdog Ofwat this week, to pitch plans to keep the troubled Thames Water out of state ownership.

The group, composed of 100 individual investors, represented by investment bank Jefferies, has been in talks with the water watchdog on Tuesday, according to Sky News.

It was reported by Sky News’ Mark Kleinman, that these lenders account for over £12bn of Thames Water’s debt.

This is roughly two-thirds of its total debts, and they are racing to find a solution to keep the troubled company away from public hands.

Creditors have argued at the meeting that Ofwat needs to demonstrate flexibility in its consideration of Thames Water’s business plan in order to make the company investible.

Thames Water, the UK’s largest water firm with around 15 million customers, announced in September that it was seeking fresh repayment terms and confirmed it had only about £1.6bn of funds left.

It cannot access all of this cash without the explicit consent of its lenders, which are owed about £15bn.

Should lenders refuse, Thames has said it would run out of available cash by the end of December.

According to Sky News, a deal needs to be agreed by the middle of November, as the regulator is set to sign off its final regulatory determination for Thames’ business plan at a board meeting.

Back in August, Ofwat hit the water company with a £104m fine related to the companies’ poor management of wastewater treatment works and wider sewer networks, including their operation of storm overflows.