Thames Water: UK water firm sees sewage spills rise and warns it will run out of cash by March - as debts swell to more than £19bn
Thames Water has reported a 40% increase in pollution incidents - while also warning it will run out of money by next March.
The debt-riddled UK water firm has said it will run out of cash by March next year if it fails to secure court approval for a £3bn financial lifeline, risking temporary nationalisation. Britain’s biggest water supplier said today (Tuesday 10 December) that all of its funds may be “exhausted” if it fails to secure the emergency funding and that its much-criticised environmental performance had worsened.
The company, which has 16m customers in London and the south east, recorded a 40% increase in pollution incidents in the six months to 30 September. Thames reported 359 category one to three pollution incidents in the six months to 30 September, blaming an especially wet spring and summer.
The Thames Water chief executive, Chris Weston, said that after “record rainfall and groundwater levels in our region, pollutions and spills are unfortunately up”. Its sewage spills are up while its debts have also risen - growing to £15.8bn during the half-year, from £14.7bn during the same period a year earlier.
However, its overall debt is even greater – it has previously said its total debt pile was more than £19bn. The update on its finances comes at a critical time for the company.
It faces two critical court dates, on 17 December and on 20 January, in order to secure approval for the money – referred to as a “liquidity extension” – which some creditors have already agreed to lend it. If the court and its creditors approve, then the proposed deal would give Thames enough funds to continue until October next year. Thames is also seeking to raise £3.25bn in new equity to fund investments up to 2030.
Mr Weston said: “Today’s news demonstrates further progress to put Thames Water on to a more stable financial footing as we seek a long-term solution to our financial resilience. We’ve reached key milestones in establishing a more stable financial platform, agreeing a liquidity extension transaction proposal and progressing our equity raise process.”
Covalis Capital, a UK infrastructure investor, is reportedly interested in bidding for Thames, with advice from the French water contractor Suez. It has offered a £1bn upfront injection of cash with a further £4bn raised from breaking up and selling off parts of Thames before listing the remaining operation. Under the proposal, the UK government would hold a share with voting rights and a seat on the board.