Thames Water creditors try to rally more investors for £1.5bn rescue funding
The water company’s lenders, including investment giants BlackRock, Abrdn and M&G, want more firms to take part in their rescue funding deal.
A group of Thames Water’s lenders has called on more firms to help foot the bill for a £1.5 billion cash injection designed to give the struggling water company a temporary lifeline.
The cluster of investment giants including BlackRock, Abrdn and M&G, which drew up the funding plans, have already agreed to backstop the fundraise, which effectively guarantees Thames Water can keep operating until October 2025.
But the group, which collectively holds about £12 billion in so-called Class A debt of Thames Water, issued the plea on Monday for more firms to take part in the deal.
The statement is partly aimed at a secondary group of firms which also hold a portion of Thames Water’s debt – thought to be about £1 billion of riskier, Class B bonds.
The Class B bondholders drew up a rival fundraising plan last week, but it was not endorsed by the utility company.
Thames Water has been at the centre of growing public outrage over the extent of pollution, rising bills, high dividends and executive pay and bonuses at the UK’s privatised water firms.
The company, which is the UK’s largest water provider, has more than £15 billion in debt, while also facing a crisis caused by long-term lack of investment in its water infrastructure.
The group of Class A creditors issuing the statement on Monday is made up of more than 100 global investment firms, and also includes the US hedge fund Elliott Investment Management, plus investment firms Apollo Global Management and Silver Point Capital.
A spokesman for the creditor group said the funding deal is “a critical step in stabilising the company”.
“This facility is open to all creditors and we want as many institutions as possible to support the company’s turnaround efforts.”
“Our creditor group is working intensively with the company to develop a plan that will ultimately lead to a restructuring that unlocks billions of pounds in new investment capital and helps deliver the improved service that customers and the environment deserve.
“We want to work constructively with all parties to give Thames the best opportunity to attract the new equity it needs and allow for a full recapitalisation and successful turnaround.”
