LONDON: Thames Water Utilities Ltd’s board members are set for last-ditch talks to update their business plan this week after shareholders branded the previous one “uninvestible”.
Directors of the heavily indebted utility are set to meet tomorrow, with the plan expected to be released on Friday, according to a person familiar with the plans who asked not to be identified while discussing private matters.
A spokeswoman for Thames Water declined to comment.
Thames supplies a quarter of the water and sewage services to England, including London.
It’s rushing to find at least £2.5bil (US$3.1bil) in equity after parent company Kemble Water Holdings Ltd last month refused to inject any more money into the business.
Thames needs the cash to fund its turnaround, fix chronic leaks and sewage spills and develop new supplies in the face of a worsening drought tied to climate change.
But investors said an overly restrictive set of regulations from industry watchdog Ofwat made it impossible for them to provide the money.
Kemble, which gets all of its income from Thames Water dividends, defaulted on its debt a week after declining further payouts.
When Thames Water unveiled its new five-year business plan in October, the utility said it wanted to raise bills by 40% to fund an investment programme totalling £18.7bil.
Those figures may be revised upward as the firm works to meet new environmental protection rules set by the government.
The plan is being scrutinised by Ofwat. A draft determination will be announced on June 12.
Other water companies have increased their expected capital expenditures and the amounts they charge customers following discussions with Ofwat and the government.
In March, Southern Water Services Ltd, another poor performer, raised its expected expenditure by 8.5% and said it now sees average annual customer bills at £727 by 2030, compared with an October projection of £681. — Bloomberg
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