LONDON - Thames Water Utilities Limited (TWUL) has agreed with its economic regulator, Ofwat, to postpone its request for a re-determination by the Competition and Markets Authority (CMA) for up to 18 weeks from today. This deferral follows the company’s announcement on February 14, 2025, regarding its dissatisfaction with Ofwat’s Final Determination which TWUL believes does not adequately serve its customers, communities, and the environment.
Despite the deferral, TWUL maintains that the Final Determination is not in the best interests of its stakeholders. However, the company is exploring a market-led solution for recapitalization, including a potential equity raise, which may render the need for a CMA reference unnecessary. Sir Adrian Montague, Chairman of Thames Water, expressed gratitude towards Ofwat for their constructive approach in recent discussions and emphasized the goal of achieving a sustainable recapitalization for the long-term benefit of customers and stakeholders.
Regarding the equity raise process, TWUL has received proposals from six parties since initiating the process in the summer of 2024. These proposals vary in valuation, structure, and impact on stakeholders. Five of the proposals suggest a material impairment of Class A debt, with one exception from a Class B creditor, which is contingent on significant conditions. The sixth proposal, which does not specify financial metrics, aims for a minority equity investment to partner with other investors.
Some of the proposed transactions would allow creditors to exchange debt impairment for rights to share in the company’s future growth and/or opportunities to co-invest. The company is pursuing regulatory support and accommodations for these proposals, which are essential for a sustainable recapitalization. While discussions with relevant parties continue, there is no assurance of a binding equity proposal or its implementation. Consequently, senior creditors are concurrently considering alternative transaction structures to recapitalize the business.
The company targets to have transaction terms agreed upon in the second quarter of 2025 and aims to complete the recapitalization in the third quarter of 2025. The information is based on a press release statement and provided by RNS, a news service of the London Stock Exchange (LON:LSEG), and approved by the Financial Conduct Authority in the United Kingdom (TADAWUL:4280).
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