Thames Water: Debt-riddled UK water firm hunts for £3.3bn emergency fundraising deal after £104m fine over 'sewage failures'

According to reports, the trouble UK water firm has been in contact with Brookfield Infrastructure Partners and Global Infrastructure Partners. It has also reportedly approached US fund Stonepeak.

The firm, which is the largest of Britain’s privatised regional monopolies, has set itself a deadline of early November to assemble potential investors for the equity raise, according to the Telegraph. Last month, Thames Water was made to appoint an independent monitor and develop a “suitable” turnaround plan by regulator Ofwat after its credit rating was downgraded to “junk” by Moody’s.

Ofwat also hit the water company with a £104m fine related to its poor management of wastewater treatment works and wider sewer networks, including their operation of storm overflows. Ofwat said the firm “failed to ensure that discharges of untreated wastewater from storm overflows occur only in exceptional circumstances, which has resulted in harm to the environment and their customers”.

A spokesperson for Thames Water at the time said: “We take this matter very seriously and have cooperated at every stage of Ofwat’s investigation. We regard all untreated discharges as unacceptable, even when they are permitted, and are taking action to improve the health of our rivers as a key area of focus and investment.”

It is far from clear whether the fundraising deal will be successful, as Ofwat will not rule until December on how much Thames is allowed to increase its bills by, and how much it can spend on upgrading its network, over the next five years.

In its draft decision in July, the regulator said that Thames could raise bills by 23 per cent over the period, far less than the 44 per cent rise it had asked for. A group of Thames’s creditors are also working on their own rescue plan for the company, but the belief is that this effort is unlikely to succeed.

Under their plans creditors could invest fresh equity of their own into the business. City sources said the hope is that both plans could eventually merge, delivering the injection of cash the business needs and averting a temporary nationalisation.

The Times contacted Thames Water, Brookfield and GIP but they declined to comment.