Source: Sharecast
The UK’s largest water company said it had entered into a transaction support agreement (TSA) with certain senior creditors, under which debts falling due in 2027 would be pushed back to March 2028.
If accepted, the extension would "afford the company additional time to agree terms of a future recapitalisation", Thames Water said, as well as supporting regulatory investment requirements. "As such, the signing of the TSA is an important milestone in Thames Water’s progress towards a recapitalisation," it added. Creditors representing £12bn of secured debt have entered the TSA, with processes ongoing to facilitate further lender accessions to the scheme.
Thames Water - which supplies 16m customers in London and the south east - has been trying to avoid special administration, a type of re-nationalisation, for over two years, after running up debts of more than £20bn.
It is currently in drawn-out discussions with regulators about a potential bailout. Creditors including US hedge fund Elliot Management want to take formal ownership and have pledged to inject more than £3bn of fresh equity alongside a new debt facility. But in return the consortium - called London & Valley Water - wants the regulator to reduce environment investment requirements and sanctions, and to write off millions of pounds of outstanding fines.
Thames Water said on Monday it remained engaged in "construction discussions" regarding the proposed recapitalisation, but acknowledged that the board, Ofwat, other regulators and relevant investment committees "have made no decision to accept and take forward any proposal" to implementation.