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Thames Water only has enough cash to survive little more than five weeks.
The UK’s biggest water provider, which serves 16mn customers in and around London, does not have enough money to repay a £200mn loan due on March 24.
While the taps will keep running even if Thames Water tips into default, it is an existential moment for both the company and the wider system of privatised utilities that has prevailed in England and Wales since 1989.
Even if Thames Water were able to convince its lenders to give temporary forbearance, the debt-ridden utility’s general counsel Andy Fraiser told a London High Court hearing this month that it would still in effect risk “running on vapour”.
Thames Water, already straining under a £19bn debt load, is trying to borrow its way out of trouble. The utility claims that an up to £3bn loan from its top-ranking creditors, which include distressed debt specialists such as Elliott Management, will give it breathing room needed to raise equity from new investors and renegotiate its debts.
The utility needs approval from London’s High Court to implement the rescue loan, however. The judge is due to hand down his decision next week.
The emergency loan faces opposition not just from the company’s lower-ranking creditors — which include another rival camp of hedge funds trying to push through their own loan — but also from a group of environmental campaigners spearheaded by Liberal Democrat MP Charlie Maynard. He is among those pushing for special administration, a form of temporary renationalisation.
The utility also decided on Friday to appeal a decision by Ofwat over the amount by which it can raise its customer bills over the next five years.
The decision to appeal should unlock half the £3bn loan, if approved. But the final outcome also has a bearing on a parallel equity raise that the company is attempting. Thames Water has pledged to shortlist credible bidders by the end of February.
The next few weeks are littered with key deadlines relating to pressing matters that will define the future of the UK’s largest water company.
Many of those dates, listed below, are expected or subject to change.
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