Britain’s Thames Water said on Friday it needed creditors to allow it to release more cash reserves as it runs short of time in its struggle to raise the capital it needs to survive.
The company, which supplies a quarter of the population with water, stated earlier this year that it needs to raise equity of 3.25 billion pounds ($4.3 billion) over the next five years. Without new investment it said it would run out of money by May 2025.
A formal process to raise new equity would be launched in the coming weeks, Thames Water said, although it added that it did not expect that to conclude until after the water regulator had made a final decision on future tariffs, possibly in January.
Given the short time line, Thames Water said it was undertaking contingency planning.
“We have entered into discussions with our financial stakeholders to release cash reserves under our financing. This would require majority creditor consent,” the company said.
Should its creditors not let it draw on the 420 million pounds of facilities, it said cash and cash equivalents would expire at the end of December.
“We, together with our financial stakeholders, are considering options for the extension of our liquidity runway to enable time to complete a recapitalisation transaction,” the company said on Friday.
Thames Water said it had 1.57 billion pounds of liquidity on Aug. 31, which consisted of 1.15 billion of cash and cash equivalents and 420 million pounds of Class A and Class B undrawn committed facilities.
It also has a further 550 million of undrawn reserve liquidity facilities if its creditors do not give consent.
($1 = 0.7507 pounds)
(Reporting by Sarah Young）
