Thames Water creditors seek support for £1.5bn rescue fund

4th Nov 2024 12:34

(Sharecast News) - A coalition of Thames Water's creditors was reported to be seeking additional investors to support a £1.5bn rescue fund on Monday, aimed at stabilising the troubled water utility and sustaining its operations through to next October.

The group, led by major investors including BlackRock, Abrdn, and M&G, had already committed to backstop the fundraise, PA reported, effectively guaranteeing Thames Water's immediate liquidity.

However, the creditors, who collectively held around £12bn in Thames Water's senior class A debt, issued a public call for further participation in the funding effort.

PA said the appeal was directed, in part, at another group of debt holders with interests in Thames Water's more vulnerable class B bonds, representing roughly £1bn.

The secondary group recently presented an alternative funding proposal, which Thames Water declined to endorse.

PA reported that the class A creditors stressed the importance of unified support, framing the cash injection as essential to stabilising the utility and enabling a comprehensive restructuring.

Thames Water, the UK's largest water supplier, was facing severe financial strain with over £15bn in debt amid a broader crisis of underinvestment in water infrastructure.

Mounting public frustration over pollution, rising water bills, and executive compensation at private water firms had added immense public pressure.

On Sunday, thousands joined a protest in London, demanding stricter oversight and reforms across the sector.

The class A creditor group, which includes over 100 global investors such as Elliott Investment Management, Apollo Global Management and Silver Point Capital, emphasised its commitment to supporting Thames Water's turnaround, PA said.

A spokesperson for the creditors described the fund as a "critical step" toward attracting new investment capital and delivering improved services.

The group said it intended to work collaboratively with all stakeholders to secure Thames Water's financial recovery and bolster future investments.

Reporting by Josh White for Sharecast.com.