Britain’s largest water company warned last week it could run out of money in three months if the majority of its creditors do not approve further borrowing to tide it over
Thames Water vans are parked on a road as repair and maintenance work takes place in London, on April 3.Thames Water is pursuing talks with some of its creditors about a 1 billion pound lifeline to give it space to restructure 16 billion pounds of debt and avoid the threat of administration, two sources with knowledge of the matter said.
The crisis is coming to a head as Britain’s new Labour government seeks billions of pounds of capital to upgrade the country’s infrastructure, with water only one entry on a long list that also includes power grids, rail and roads. This line of credit would be key to keeping Thames Water going until it can agree a longer term debt restructuring and raise up to 3.25 billion pounds in new funds, they added.
Thames Water and its largest organized group of creditors also aim to have its rescue plans ready soon, with court dates booked for November and December for a potential restructuring deal to be approved, three sources said. Investors are asking for an improvement in Ofwat’s draft determination published in July, the sources said.
They could end up with the company or its assets being transferred to another entity, or even liquidated and dissolved.
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