Thames Water customers are set to get less bang for their buck if a consortium of creditors wins approval for its rescue plan.<\/p>\n
The development was revealed in the outline of a business plan \u2013 without some key spending details \u2013 published on Wednesday by the investors who hold much of the company\u2019s debts. The consortium is called London<\/a> & Valley Water.<\/p>\n It wants to use about \u00a320.5bn of consumers\u2019 cash to prioritise key activities but deliver fewer projects than under a deal set out by water regulator Ofwat.<\/p>\n People familiar with the London & Valley Water proposal said last year\u2019s final determination<\/a> \u2013 the highly detailed plan of how much suppliers can charge consumers \u2013 was not deliverable and the new plan offered value for money.<\/p>\n They said the new plan would make Thames viable and avoid putting the UK\u2019s largest water company, which serves 16 million consumers, into a form of temporary nationalisation.<\/p>\n The four-page summary of the plan describes \u201csignificant writeoffs by investors across the capital structure\u201d but does not yet detail how significant these will be. Instead, it will \u201cfix the foundations of Thames Water and set a clear pathway to addressing current compliance gaps\u201d.<\/p>\n The financial setup for Thames proposed by the creditors, including how much of a haircut investors will take on the debt, is being discussed with Ofwat this week.<\/p>\n The proposal will then be submitted to credit ratings agencies to see if it would bring the water company back into investment grade territory, a requirement of its operating licence.<\/p>\n Ofwat had agreed to defer a referral by Thames to the Competition and Markets Authority of the bill increases it had allowed in December last year. This deferral lasts until October, leaving a bargaining window in which to try to agree an alternative option.<\/p>\n Some insiders at Ofwat said the plan amounted to a partial rewrite of the final determination but that this was all but inevitable in the pursuit of a market-based solution for the beleaguered water company.<\/p>\n It has not been revealed how much money, alongside the \u00a320.5bn from consumers, will be provided by the consortium.<\/p>\n skip past newsletter promotion<\/a><\/p>\n Sign up to Business Today<\/p>\n Get set for the working day \u2013 we’ll point you to all the business news and analysis you need every morning<\/p>\n Privacy Notice: <\/strong>Newsletters may contain information about charities, online ads, and content funded by outside parties. If you do not have an account, we will create a guest account for you on theguardian.com<\/a> to send you this newsletter. You can complete full registration at any time. For more information about how we use your data see our Privacy Policy<\/a>. We use Google reCaptcha to protect our website and the Google Privacy Policy<\/a> and Terms of Service<\/a> apply.<\/p>\n after newsletter promotion<\/p>\n An Ofwat spokesperson said: \u201cWe continue to engage with the creditor group and will review their plan carefully to assess whether it delivers a turnaround in Thames\u2019s operational performance, and strengthens its financial resilience to the benefit of customers and the environment. We expect to receive the full plan towards the end of next week.\u201d<\/p>\n Mike McTighe, the chair designate of London and Valley Water, said: \u201cOur core focus will be on improving performance for customers, maintaining the highest standards of drinking water, reducing pollution and overcoming the many other challenges Thames Water faces.<\/p>\n \u201cThis turnaround has the opportunity to transform essential services for 16 million customers, clean up our waterways and rebuild public trust.\u201d<\/p>\n A Thames Water spokesperson said: \u201cToday\u2019s announcement underscores the London and Valley Water consortium\u2019s commitment to fixing TWUL\u2019s underlying challenges without relying on taxpayer funding. We look forward to working with stakeholders to deliver a market-led solution that benefits customers and the environment.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Thames Water customers are set to get less bang for their buck if a consortium of creditors wins…\n","protected":false},"author":2,"featured_media":393289,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[51,16,15],"class_list":{"0":"post-393288","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-business","9":"tag-uk","10":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115137695163133229","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/393288","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=393288"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/393288\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/393289"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=393288"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=393288"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=393288"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}