Thames Water to borrow more to fund revised business plan, reports say

The company, which is the UK’s biggest water firm serving 16 million customers, is reportedly drawing up a revised five-year spending plan.

Thames Water is formulating an updated business plan which could be published within days (Andrew Matthews/PA) (PA Wire)

Thames Water is formulating an updated business plan which could be published within days, as the embattled water supplier continues to scramble for cash to stay afloat, according to reports.

The company, which is the UK’s biggest water firm serving 16 million customers, is reportedly drawing up a revised five-year spending plan.

Members of the board are expected to meet on Thursday to approve the plan and executives hope to publish it on Friday, Bloomberg reported.

In its original business plan, first unveiled in October, the utility company said it wanted to raise customer bills by 40% to fund an investment programme worth £18.7 billion.

But it said water regulator Ofwat had imposed regulations on the plan which made it “uninvestable”.

It meant the funding crisis facing Thames Water deepened as investors pulled a £500 million emergency funding package that was due to be paid at the end of April.

Furthermore, the holding company behind Thames Water, Kemble Water Finance Limited, told creditors earlier this month it defaulted on some of its own debts after missing an interest payment.

Thames Water is reportedly preparing to approach lenders to fund the spending plans which means it could take out a new loan.

It has already been saddled with net debts of nearly £15 billion, while it has also come under intense scrutiny after missing sewage spill and leakage targets.

It needs the cash funding to drive its turnaround plan to meet performance targets for customers, the environment and other shareholders over the next few years.

Ofwat is currently scrutinising the plans and is due to publish its draft response in June.

Thames Water has previously stressed that it remains “business as usual” for the supplier, despite the financial difficulties.

The company declined to comment on the latest reports.