Thames Water says it has secured a dedication for an extra £750m funding by shareholders, because the debt-laden firm races to keep away from the opportunity of being positioned in short-term public possession.
The nation’s largest provider used the publication of delayed annual accounts, which confirmed a leap in financing prices, to announce additional progress in its bid to lift money to shore up its funds.
However, Thames admitted the brand new fairness was depending on traders agreeing a brand new marketing strategy.
The quantity additionally fell in need of the £1.5bn sum that the water regulator had mentioned Thames was searching for final week.
Sky News revealed final month how the federal government was drawing up contingency plans for the corporate’s collapse amid rising doubts about its potential to service a £14bn debt pile.
Thames Water has been locked in efforts to shore up its funds over current months by tapping shareholders for extra cash.
It was understood on Saturday {that a} dedication to supply new fairness had been secured from various traders, although the response to the plea for extra cash was non-binding.
The request for contemporary cash, through an fairness assist letter, was believed to have been demanded by auditors as a situation of signing off the corporate’s accounts on a going concern foundation.
They confirmed Thames spent £476.5m servicing its money owed over the yr to 31 March. It made an underlying loss after tax of £132.3m.
Thames is dashing to keep away from the opportunity of being positioned right into a particular administration regime that might successfully take the corporate into short-term public possession – as occurred to vitality supplier Bulb in 2021.
Amid criticism of previous dividend flows, its monetary place has been worsened by rising rates of interest to which many debt repayments are linked.
It is an industry-wide drawback.
At the identical time, corporations are underneath strain to bolster service efficiency following years of weak funding in infrastructure that has led to widespread anger over leaks and sewage dumps into rivers and the ocean.
On Friday, Southern Water revealed it could not be paying dividends till at the least 2025 following an extra credit standing downgrade.
Thames, which paid no dividends in its final monetary yr, mentioned it had met solely 55% of its annual efficiency commitments.
Interim co-chief executives, Cathryn Ross and Alastair Cochran, mentioned the overview of its turnaround plan was persevering with.
“It was an extremely challenging year for Thames Water and the water industry”, they wrote.
“Our network came under unprecedented pressure from record temperatures, a drought and a freeze / thaw event. At the same time, economic factors also impacted our financial results with high inflation driven by a surge in energy and chemical prices.
“In brief, our efficiency was not as we – or our clients – wished it to be.
“Despite this, we are in a robust financial position. We had £4.4bn liquidity as at 31 March 2023 and are extremely fortunate to have such supportive shareholders.
“Their dedication to delivering Thames’ turnaround and life’s important service is mirrored within the largest fairness assist bundle ever seen within the UK water sector, while taking no dividends out.”
They added: “We’re fixing extra leaks and buyer complaints have continued to fall considerably. We have additionally elevated funding in our networks and property to report ranges as we undertake an in depth overview of our ageing Victorian asset infrastructure to find out what must be accomplished to enhance operational resilience and efficiency over the long-term.”
Source: information.sky.com”