Government officials are reportedly contemplating the implementation of a special administration regime, similar to the one employed during the recent collapse of energy supplier Bulb, for water company Thames Water.
Discussions among authorities from the Department for Environment, Food and Rural Affairs (Defra), the water regulator Ofwat and the Treasury are said to be underway.
The potential move comes as concerns mount over Thames Water’s financial viability due to its debt burden.
Yesterday, the company announced that its Chief Executive, Sarah Bentley, was resigning from her position with “immediate effect”.
However, Thames Water, amidst ongoing discussions regarding its financial future, has emphasised that it maintains a robust liquidity position.
In an announcement, the company said: “Thames Water Utilities Finance notes recent press speculation concerning Thames Water.
“As envisaged in June 2022, Thames Water received the expected £500 million of new funding from its shareholders in March 2023 and is continuing to work constructively with its shareholders in relation to the further equity funding expected to be required to support Thames Water’s turnaround and investment plans.
“Ofwat is being kept fully informed on progress of the company’s turnaround and engagement with shareholders. Thames Water remains focused on delivering for its customers, the environment and stakeholders.
“Thames Water continues to maintain a strong liquidity position, including £4.4 billion of cash and committed funding, as of 31 March 2023.”
An Ofwat spokesperson told ELN: “We monitor the financial position of all the key water and wastewater companies. We have been in ongoing discussions with Thames Water on the need for a robust and credible plan to turn the business around and transform its performance for customers and the environment. We will continue to focus on protecting customers’ interests.”
A government spokesperson said: “This is a matter for the company and its shareholders. We prepare for a range of scenarios across our regulated industries – including water – as any responsible government would.
“The sector as a whole is financially resilient. Ofwat continues to monitor the financial position of all the key water and wastewater companies.”