As Thames Water, a key utility firm, struggles to manage its staggering debt of £14bn, the government is formulating contingency strategies in case of the company’s failure.
The possibility of an emergency takeover of Thames Water is being examined in Whitehall as the firm urgently tries to secure £1bn from its investors.
Ministers and the water oversight authority, Ofwat, have initiated talks regarding potentially moving the company into a Special Administration Regime (SAR), a move that would translate into a temporary shift of the company into public hands.
The Government is drawing up contingency plans for the collapse of @thameswater as the utility company battles to pay down a £14bn debt pile @Ofwat has begun discussions about the possibility of placing the company into a special administration regime pic.twitter.com/c1xPetordM https://t.co/FLm02gCycn
— Share_Talk ™ (@Share_Talk) June 28, 2023
In the background, the investment bank Rothschild and the law firm Slaughter & May are offering advice on financial strategies for the business. This comes as a £1.4bn bond from the company is due for repayment by the end of the coming year.
Last June, shareholders agreed to infuse £500m into Thames Water, which is tasked with providing water to one-quarter of UK households, as the company tried to tackle significant leakage issues.
This news coincides with the sudden resignation of the company’s CEO, Sarah Bentley, who stepped down with immediate effect this Tuesday.
