Thames Water Crisis
Thames Water faces a serious financial crisis. Water services are provided by the company to approximately 16 million customers in Britain. Leaders are under increasing pressure to find a solution for stable funding and ownership.
Investors warned over rush deal
Investor argues that the risk of a bad settlement on service quality and price would be long-term if the company allowed to drift.
The investor believes that the company should be placed into administration so as to allow for a more open sale process.
Regulation and debt rescue plans
The plan is to also inject additional funding into the company to stabilize operations.Lenders want to see more flexibility in future penalties for pollution or leakage.
Lenders say that their plan is the best way to stabilize the firm without disrupting the essential services of water.
Bids and calls for administration
CKI Holdings, based in Hong Kong, has indicated an interest to submit a competitive offer. A controlled administration could lead to stronger management and better bids, according to the firm.
CKI claims it is experienced in running large utility companies, and that it believes it can improve infrastructure and performance. The company claims that customers will benefit from an open bidding process rather than a lender takeover.
Position of the Government on Regulation
Ofwat, the water regulator, is currently reviewing all options relating to the lender’s control of a company. Final decision expected within the next few months.
Risks and responses of the company to administration
Thames Water has issued a warning that entering into a special administrative regime may cause delays and increase costs. This process, the company claims, could slow urgent infrastructure upgrades as well as disrupt operations.
