Thames Water - comment

More bad news for Thames Water creditors and shareholders as Ofwat has only approved a 21% increase in average household water bills for the next five years ending in 2030 vs. a proposed 40% + by the company. Thames Water's proposed increase of £191 per household was trimmed to £99. Ofwat has done that across Thames Water’s peers as well. Along with a £88 billion spending package to clean up rivers & seas in the UK and an earlier statement that Thames Water will run out of liquidity by June 2025 means that a restructuring of its £15 billion debt is a question of when rather than if.  

 The next big unknown in this story is how will the restructuring be implemented.  The additional announcement that Thames Water has been put into a special “turnaround oversight” regime which includes the utility to fully re-evaluate its plans for transformation, provide a “delivery action plan” and report on its progress regularly implies that Ofwat will probably play a bigger plan than expected in any potential restructuring plan. But we expected that from a Labour government anyway.

 It will be an interesting summer…