The financial future of Thames Water’s parent company, Kemble Water Finance, hangs in the balance as lenders, including ING and a major Chinese institution, are owed £190 million by the end of this month. The looming repayment deadline has put the Dutch banking giant ING in a crucial position to determine the fate of the struggling water company.
Sources reveal that if the loan is not repaid, Kemble Water Finance could face default and potential administration, further exacerbating the crisis facing Britain’s largest water provider. However, the default would not directly impact the water and sewage services provided to 15 million Thames Water customers in London and southeast England.
Despite the financial turmoil, industry insiders remain cautiously optimistic that the lending syndicate will agree to extend the repayment deadline, providing a lifeline for Kemble Water Finance. The company has been unable to repay the loan due to regulatory restrictions on dividends from Thames Water’s operating company.
Thames Water’s shareholders recently decided against a promised £500 million equity injection into the company, leading to a standoff with industry regulator Ofwat. The impasse has left Thames Water facing a financial abyss, with over £18 billion in debt and a recent credit rating downgrade.
As the company navigates its financial challenges, calls for the renationalization of major water companies in the UK have intensified. The situation at Thames Water underscores the broader issues facing the privatized water industry and is likely to be a key topic during the upcoming general election campaign.