The developments threatened to overshadow a new “action plan” that Jeremy Hunt, the Chancellor, said he had agreed with regulators on Wednesday to ensure consumers are being treated fairly. The Universities Superannuation Scheme (USS), Britain’s biggest pension fund and Thames Water’s only UK shareholder, is supportive of injecting fresh money into the business, senior sources added. Hope remains that a deal can yet be done, however. The Ontario Municipal Employees Retirement System, which owns a 32pc stake in Thames, is said to be reluctant to inject fresh capital into the business after a series of poor investments in the UK.Ĭity sources said they were aware that another of Thames’s nine predominantly overseas investors was yesterday also still yet to decide whether to pump in money to save the company, which has 15 million customers. ![]() In a sign of the battle now facing Thames, its biggest shareholder is understood to have drafted in restructuring and insolvency experts from the Magic Circle law firm Clifford Chance to advise on its options. It added that it was prioritising several companies including Thames and SES. In an annual review of the water industry published at the end of last year, Ofwat said that it was “monitoring and engaging with companies on a prioritised basis, based on our assessment of their financial resilience”. SES Water, which supplies about 745,000 people in south-east London, West Sussex and Kent, has been put up for sale by its Japanese owners after they baulked at putting new money into the business. Any failure of Thames risks having a significant impact on the company’s hunt for a new owner. However, restructuring and insolvency professionals from Big Four accountants such as PwC and Alvarez & Marsal are already advising other water companies on their next steps in an attempt to head off a wider crisis. ![]() The environment minister Rebecca Pow, who discussed Thames’ predicament at a meeting with regulator Ofwat on Wednesday, told the House of Commons that “the sector as a whole is financially resilient”. Meanwhile, documents released last week suggested that the leakage rate from Thames Water pipes was at its highest rate since 2018 despite efforts to fix the problem. It comes as the industry battles accusations it has been slow to tackle leakages and is allowing rivers to become heavily polluted with raw sewage.Ĭustomers are already facing a 40pc rise in their water bills over the next five years to pay for the cost of tackling the sewage crisis, according to leaked documents, while the Met Office said earlier this week that the UK is set to have the hottest June on record this year – raising the prospect of fresh hosepipe bans in the coming months. “We need to make sure that Thames Water as an entity survives.” Kemi Badenoch, the Business Secretary, told broadcasters on Wednesday that she was “very concerned” about Thames and added: “Obviously this is a commercially sensitive situation and I know that my colleagues across government are looking at what we can do. Ofwat, the industry regulator, warned in December that it had concerns about the financial resilience of several other water suppliers. ![]() An administration could last six months or more, City sources said.įears are growing that the collapse could trigger a domino effect across the industry, which is laden with £60 billion of debt built up during years of lower interest rates. Talks are ongoing and a rescue deal could yet be agreed, but the Government is preparing to put the company into special administration if needed – meaning that the business would be controlled and bankrolled by the taxpayer until a buyer can be found. Officials are laying the groundwork for the emergency nationalisation of Thames Water as investors refused to give the company a £1bn lifeline. Whitehall was on Wednesday night drawing up contingency plans to nationalise swathes of Britain’s water industry as the country’s biggest supplier teetered on the brink of collapse.
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