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| Thames Water in funding talks amid collapse fears | Thames Water in funding talks amid collapse fears |
| (about 1 hour later) | |
| Thames Water is in talks to secure extra funding as the government says it is ready to act in a worst case scenario if the company collapses. | Thames Water is in talks to secure extra funding as the government says it is ready to act in a worst case scenario if the company collapses. |
| The water firm, which serves a quarter of the UK population, has billions in debt and is under pressure with its boss resigning unexpectedly on Tuesday. | The water firm, which serves a quarter of the UK population, has billions in debt and is under pressure with its boss resigning unexpectedly on Tuesday. |
| The government said "a lot of work is going on behind the scenes" and it had a process in place "if necessary". | The government said "a lot of work is going on behind the scenes" and it had a process in place "if necessary". |
| Regardless of what happens, water supplies will continue as normal. | Regardless of what happens, water supplies will continue as normal. |
| Even if the firm were to collapse, it would not happen imminently, the BBC understands. | |
| The UK's biggest water firm has been heavily criticised over its performance following a series of sewage discharges and leaks. Thames Water said it is trying to raise the cash it needs to improve. | |
| The company added that water regulator Ofwat was "being kept fully informed" on progress, and said it had "strong" reserves including £4.4bn of cash. | The company added that water regulator Ofwat was "being kept fully informed" on progress, and said it had "strong" reserves including £4.4bn of cash. |
| The firm leaks more water than any other water company in UK, losing the equivalent of up to 250 Olympic size swimming pools every day from its pipes. | The firm leaks more water than any other water company in UK, losing the equivalent of up to 250 Olympic size swimming pools every day from its pipes. |
| Talks between the UK's biggest water company, ministers and Ofwat about contingency plans for the business were first reported by Sky News. | Talks between the UK's biggest water company, ministers and Ofwat about contingency plans for the business were first reported by Sky News. |
| If the firm cannot secure additional funding, it could be temporarily taken over by the government until a new buyer is found, in a special administration regime (SAR). This route was most recently taken with energy supplier Bulb after it ran into financial difficulties. | If the firm cannot secure additional funding, it could be temporarily taken over by the government until a new buyer is found, in a special administration regime (SAR). This route was most recently taken with energy supplier Bulb after it ran into financial difficulties. |
| Asked about the company in Parliament, environment minister Rebecca Pow said it was not her place to comment on the financial position of a company, but said water firms were "considered resilient". | Asked about the company in Parliament, environment minister Rebecca Pow said it was not her place to comment on the financial position of a company, but said water firms were "considered resilient". |
| "Ofwat is working very closely with Thames Water to ensure there is a viable business there," she added. | "Ofwat is working very closely with Thames Water to ensure there is a viable business there," she added. |
| Earlier Business Secretary Kemi Badenoch said she was "very concerned" by the situation, adding "we need to make sure Thames Water as an entity survives". | Earlier Business Secretary Kemi Badenoch said she was "very concerned" by the situation, adding "we need to make sure Thames Water as an entity survives". |
| She said her colleagues across government were "looking at what we can do". "I don't know too much about what the plans are going to be," she added. | She said her colleagues across government were "looking at what we can do". "I don't know too much about what the plans are going to be," she added. |
| 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 |
| 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. |
| Last year Thames Water's owners - a consortium of institutional investors - pumped £500m into the business and pledged a further £1bn to help 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 turn things around. |
| But reports suggest the firm is struggling to raise the remaining cash which it needs to service its debt. Interest payments on more than half of its debt are linked to the rate of inflation, which has soared over the last year. | But reports suggest the firm is struggling to raise the remaining cash which it needs to service its debt. Interest payments on more than half of its debt are linked to the rate of inflation, which has soared over the last year. |
| Ms Bentley said Thames Water's poor record on sewage management was "symptomatic of the broader failing" at the company before her time. | Ms Bentley said Thames Water's poor record on sewage management was "symptomatic of the broader failing" at the company before her time. |
| "When we look back, we have decades of underinvestment which has led to cost-cutting and some poor decisions leaving the business in a really debilitating state," she told the BBC in March. | "When we look back, we have decades of underinvestment which has led to cost-cutting and some poor decisions leaving the business in a really debilitating state," she told the BBC in March. |
| 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". | 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 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 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. It has however paid dividends internally to its parent company. | For the last five years, its owners have backed the decision not to pay any dividends to external shareholders. It has however paid dividends internally to its parent company. |
| 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. |
| Shadow energy secretary Ed Miliband said the situation at Thames Water was "an absolute scandal".Asked whether the company should be nationalised, he replied: "I don't think the answer to the water company's crisis is to pay out billions of pounds to shareholders, when that money could be going into sorting out what is happening in the water industry". | Shadow energy secretary Ed Miliband said the situation at Thames Water was "an absolute scandal".Asked whether the company should be nationalised, he replied: "I don't think the answer to the water company's crisis is to pay out billions of pounds to shareholders, when that money could be going into sorting out what is happening in the water industry". |
| Related Topics | Related Topics |
| Companies | Companies |
| Sewage | Sewage |
| Thames Water | Thames Water |