Thames Water creditors prepare fresh funding backing, Sky News reports
Creditors Plan New Financial Support for Thames Water
Background and Current Situation
July 8 (Reuters) - Creditors seeking to take control of Thames Water are preparing to provide fresh financial backing to the debt-laden utility, Sky News reported on Wednesday, citing sources.
Details of the Funding Plan
• The lenders, who hold a majority of Thames Water's roughly £20 billion ($26.81 billion) of debt, plan to state that they will provide additional funding over the next 12 months, according to the report.
• The move comes as Thames Water seeks a going-concern opinion from its auditor ahead of a July 15 accounts deadline, Sky News said, adding that the company plans to publish its annual results next week.
Comfort Letter and Equity Injection
• The creditors will provide Thames Water with a "comfort letter" ahead of the accounts filing, the report added.
• The proposal would inject £3.35 billion of equity and £3.5 billion of debt into Britain's largest water supplier, Sky News said.
Dividend Policy and Previous Proposals
• The plan also includes a commitment not to pay dividends until the 2030s, Sky News added.
• Reuters could not immediately verify the report. Ofwat referred Reuters to the creditor group for comment, while Thames Water and creditor group London & Valley Water declined comment.
• Senior creditors had proposed a multibillion-pound rescue package to stabilize the company, Reuters had reported previously.
Government Response and Outlook
• Last month, Britain's government rejected a £10 billion rescue proposal for Thames Water, increasing the likelihood of temporary nationalisation if a turnaround deal fails.
Additional Information
($1 = 0.7460 pounds)
(Reporting by Bipasha Dey in Bengaluru; Editing by Tasim Zahid and Jonathan Ananda)
