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| Government 'prepared for range of scenarios' amid Thames Water collapse fears | Government 'prepared for range of scenarios' amid Thames Water collapse fears |
| (about 1 hour later) | |
| The government has said it is prepared for a "range of scenarios" following reports that Thames Water could be on the brink of collapse. | The government has said it is prepared for a "range of scenarios" following reports that Thames Water could be on the brink of collapse. |
| Thames Water is under pressure over its performance and reportedly struggling under £14bn of debt. | Thames Water is under pressure over its performance and reportedly struggling under £14bn of debt. |
| Business Secretary Kemi Badenoch said she was "very concerned" by the situation, adding "we need to make sure Thames Water an entity survives". | |
| The company said it is working to raise the funds it needs to improve the firm. | |
| "Ofwat is being kept fully informed on progress of the company's turnaround [plan] and engagement with shareholders," Thames Water said. | |
| "Thames Water continues to maintain a strong liquidity position, including £4.4 billion of cash and committed funding." | "Thames Water continues to maintain a strong liquidity position, including £4.4 billion of cash and committed funding." |
| Whatever happens to Thames Water, which is the UK's biggest water firm, providing water for 15 million people in London and the South East, its water supplies will continue uninterrupted. | Whatever happens to Thames Water, which is the UK's biggest water firm, providing water for 15 million people in London and the South East, its water supplies will continue uninterrupted. |
| Sky News first reported that company was in talks with ministers and Ofwat about contingency plans for the business. | |
| One option would be placing Thames Water in a special administration regime (SAR), which would see it temporarily taken over by the government. | One option would be placing Thames Water in a special administration regime (SAR), which would see it temporarily taken over by the government. |
| This route was most recently taken with energy supplier Bulb after it ran into financial difficulties. | This route was most recently taken with energy supplier Bulb after it ran into financial difficulties. |
| Thames Water boss quits after sewage spills | Thames Water boss quits after sewage spills |
| Thames Water bosses forgo bonuses over poor service - BBC News | Thames Water bosses forgo bonuses over poor service - BBC News |
| When asked about the reports in the Commons, environment minister Rebecca Pow said it was not her place to comment on the financial position of a company. | |
| But she added that there was "a lot going on behind the scenes with Thames Water to ensure customers will not be impacted and there is a process in place if necessary to move us to the next stage." | |
| Earlier Ms Badenoch said: "I know that my colleagues across gov are looking at what we can do. I don't know too much about what the plans are going to be." | |
| On Tuesday, Thames Water's chief executive Sarah Bentley quit the business after just two years in the job. It came weeks after she was asked to forgo her bonus over the company's handling of sewage spills. | On Tuesday, Thames Water's chief executive Sarah Bentley quit the business after just two years in the job. It came weeks after she was asked to forgo her bonus over the company's handling of sewage spills. |
| The firm has not given a reason for her departure, but it comes amid questions over the company's financial stability. | The firm has not given a reason for her departure, but it comes amid questions over the company's financial stability. |
| It has been under pressure to improve its performance amid criticism of its handling of sewage contamination and leaks. | It has been under pressure to improve its performance amid criticism of its handling of sewage contamination and leaks. |
| The firm leaks more water than any other water company in UK, losing the equivalent of to 250 Olympic size swimming pools every day from its pipes. | |
| Last year Thames Water's owners - a consortium of institutional investors - pumped £500m into the business and pledged a further £1bn to help it turn things around. | Last year Thames Water's owners - a consortium of institutional investors - pumped £500m into the business and pledged a further £1bn to help it turn things around. |
| But reports suggest the firm is struggling to raise the remaining cash which it needs to pay down debt. | |
| An Ofwat spokesperson confirmed there were "ongoing discussions" with the firm about the need for "a robust and credible plan to turn the business around". | |
| Debt fears | Debt fears |
| Water companies have taken on large amounts of debt, collectively about £60bn, since they were privatised in 1989, with Thames Water's debt totalling £14bn. | Water companies have taken on large amounts of debt, collectively about £60bn, since they were privatised in 1989, with Thames Water's debt totalling £14bn. |
| There have been long running concerns at Ofwat, the water company regulator, over Thames Water's ability to service that debt and raise the huge amounts of cash needed to modernise its infrastructure amid rising inflation and higher interest rates. | There have been long running concerns at Ofwat, the water company regulator, over Thames Water's ability to service that debt and raise the huge amounts of cash needed to modernise its infrastructure amid rising inflation and higher interest rates. |
| For the last five years, its owners have backed the decision not to pay any dividends to external shareholders. | For the last five years, its owners have backed the decision not to pay any dividends to external shareholders. |
| Water bills have been on the rise, with the annual bill for an average household in England and Wales hitting £448 in April. | Water bills have been on the rise, with the annual bill for an average household in England and Wales hitting £448 in April. |
| Bills are set to rise again in 2025 by about £42 per household on average over a "long time frame", former Environment Secretary George Eustice said on Wednesday. | Bills are set to rise again in 2025 by about £42 per household on average over a "long time frame", former Environment Secretary George Eustice said on Wednesday. |
| It came after the Times reported bills could rise by as much as 40%, a figure Mr Eustice dismissed. | It came after the Times reported bills could rise by as much as 40%, a figure Mr Eustice dismissed. |
| "That figure [40%] is something that the industry has put out and it is probably because they are about to commence their negotiations with Ofwat and I think that the figure will be far lower than that when it comes to it," he told the BBC's Today programme. | "That figure [40%] is something that the industry has put out and it is probably because they are about to commence their negotiations with Ofwat and I think that the figure will be far lower than that when it comes to it," he told the BBC's Today programme. |
| Related Topics | Related Topics |
| Companies | Companies |
| Sewage | Sewage |
| Thames Water | Thames Water |