Thames Water has mobilised a team of City experts to lead urgent restructuring discussions this week amid concerns that its parent company could face collapse by month's end.
The crucial talks were anticipated shortly after Thames Water's investors indicated their reluctance to inject further funds into the company to stabilise its immediate cash flow, according to a source.
Britain's largest water company has reportedly enlisted the expertise of advisors from Teneo, the firm that oversaw the restructuring of Bulb Energy. This move comes amidst an investor standoff, heightening apprehensions regarding the future of its parent entity, the Kemble Water Group. Additionally, Thames Water is collaborating with advisors at Rothschild to explore potential financing solutions for the company.
Last week, Thames announced that Kemble's owners, including major pension funds Omers and USS, as well as Abu Dhabi and Chinese sovereign wealth funds, had engaged restructuring advisors at Alvarez & Marsal. This firm oversaw the Chapter 11 bankruptcy of WeWork in the US last November.
These discussions, aimed at charting a path forward for the heavily indebted water company, were initially reported by the media. They arise following Kemble's owners' decision to withdraw £500 million in emergency funding amid a deadlock with the industry regulator regarding proposals to increase household bills.
With over £18 billion in debt, the company faces mounting pressure as Kemble is scheduled to repay a £190 million loan by month's end. This situation has raised fears that the parent company could potentially become insolvent without government intervention.
