Thames Water’s largest group of creditors has failed to secure a veto over whether a £3bn emergency cash injection would be used to settle regulatory fines imposed over a series of breaches in terms of environment and performance.
Sky News can reveal a clause stipulating the company’s A lenders – who account for well over £10bn of the debt owed by Britain’s biggest water company – would be able to block payment of fines resulting from their emergency cash injection, was removed at a previous meeting. stage of negotiations with the sector regulator.
A newspaper report earlier this week suggested creditors had told Ofwat the capital could not be used to settle hundreds of millions of pounds in fines owed over the next 12 months.
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However, sources close to the group confirmed on Thursday that there was no formal veto.
“They wanted (a veto), but it was removed from formal negotiations weeks ago,” one of them said.
In a list of conditions issued several weeks ago and posted on the Thames Water website, the parties said Thames Water would “make reasonable efforts to engage with Ofwat, the Environment Agency and the Water Inspectorate.” drinking water, in order to mitigate the financial impact of any potential fine that may be imposed. may be payable or compliance costs which may be incurred in connection with any investigation.”
Thames Water is drowning in debt of more than £15 billion and faces temporary nationalization if it fails to secure billions of pounds of new equity funding in the coming months.
Sky News revealed last month that KKR, the private equity giant and shareholder of Northumbrian Water, was among the parties engaged in negotiations with Thames Water advisers.
This week, Bloomberg reported that a consortium including Castle Water, controlled by Conservative Party treasurer Graham Edwards, was set to inject up to £4 billion in exchange for a majority stake in the company.
The entire sector faces a critical moment on December 19, when Ofwat publishes its final decisions on water companies’ five-year investment plans.
Spokespeople for Thames Water and its creditors declined to comment.