More bad news for customers of stakeholders of Thames Water as the parent company of Britain’s biggest water supplier has notified its creditors that it’s defaulted on its debt.
The worrying news raises the prospects of the under-fire supplier facing a restructuring or even complete collapse, which will come as a shock to many of its 16 million customers in the south-east.
Or will it? In truth, this news is hardly a big surprise. The company has been dogged by financial struggles for years, with recent reports revealing shareholders were unwilling to invest any more money into the company, unless the proposal to raise customer bills by 40 per cent was approved – something Ofwat rejected.
Just recently, management at Thames Water appointed experts at Teneo, the adviser that managed the collapse of Bulb Energy, to help navigate the frosty standoff that has threatened the future of its parent company, the Kemble Water Group.
Additionally, Thames Water is also continuing to work with advisers at Rothschild to explore potential financing options for the company but as of yet, nothing is in place, raising further doubts about the company’s future.
According to a report in the Guardian, an interest payment that was due on Tuesday was missed, with Kemble Water requesting that its lenders and bondholders take no creditor action in order to “provide a stable platform while all options are explored” with its stakeholders.
In a move to ease some of the growing concerns, executives said that customers are protected and service would continue to operate as normal if Kemble were to eventually collapse.
Additionally, the company confirmed it has £2.4bn of funds, which would see it through to next summer, offering plenty of time for a contingency plan to come into force.
Bad To Worse
This is the latest in a long list of worrying developments at Thames Water. Late last year the company was hit with a £73m fine for breaking regulations on pollution and leakages.
This comes after reports of mounting debts, with Ofwat fining the company due to a huge dividend payment it made.
This was a breach of Ofwat’s recent rule that was introduced last year which states that companies should only declare or pay dividends once they’ve taken into account the delivery of service for customers and the environment, as well as considering current and future investment needs and long-term financial resilience.
So Thames Water hasn’t been filling its customers of investors with confidence, and this latest development will merely add to those concerns.
Comparing Water Suppliers
If you’re a customer of Thames Water then you may well be concerned with this news, and for good reason. After all, you want to know the company you’re handing your hard-earned cash over to is in a good state of health.
For households, sadly you don’t have much power as your supplier is fixed. However, for business owners, it’s possible to change water suppliers.
Here at SwiftSwitch, we believe news like this merely highlights how important it is to compare business water to ensure you’re partnering with a reliable water company.
When it comes to finding a reputable water supplier, some undoubtedly perform much better than others. While some are facing struggles, others are massively outperforming their peers.
At SwiftSwitch we offer detailed information on many different suppliers including how they’re performing, so you’ll have all the info you need to make the best decision for your business.
Another benefit of using a comparison site like SwiftSwitch is we continually stay informed about all of the latest news and market developments, so if you want to partner with a company that’s providing a reliable service then get in touch.
