Thames Water shareholders to provide £750m in funds after firm faces fears of collapse over £14bn debt pile
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Thames Water investors have agreed to provide £750 million in funds over the next 18 months after the company faced fears of collapse as it racked up £14bn in debt.
The agreement from the company’s shareholders is less than the £1 billion it was hoping to secure.
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Hide AdThe government has said it is ready to act in a worst case scenario if the company, which serves a quarter of the UK’s population, collapses.
At the end of June, the government reportedly drew up contingency plans to temporarily bring Thames Water back into public hands as its debt pile reached £14 billion.
Ministers were said to be in talks about the possibility of emergency nationalisation of the water company under a so-called special administration regime (SAR).
Last year, Thames Water’s owners invested £500 million in the firm but warned that “further shareholder support may be required”.
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Hide AdOn Monday (10 July), the utility giant said it would be looking for an extra £2.5 billion from its shareholders for its next business plan which covers the period from 2025 to 2030.
The government has insisted that Thames Water customers will “not be impacted” by reports the firm may collapse due to its debt pile.
Speaking to Sky News, Business Secretary Kemi Badenoch, said: “We need to make sure that Thames Water as an entity survives.
“At the moment, or certainly up until now, the regulator has been focused on keeping consumer bills down, but there’s a lot of infrastructure work that needs to take place and we need that entity to survive and continue going.”
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Hide AdThe extra funds from the company’s shareholders comes after its CEO, Sarah Bentley, resigned with immediate effect last month amid mounting anger over Thames Water’s environmental performance.
Bentley resigned after promising to forgo her bonuses in the wake of mounting public outrage over the amount of sewage spills in UK rivers.
The water company leaks water up to 250 Olympic-sized swimming pools every day from its pipes - more water than any other water company in the UK.
The firm has also been hit with a £3.3 million fine after it admitted pumping “millions of litres” of undiluted sewage into rivers near Gatwick Airport, killing more than 1,400 fish.
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