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Thames Water hires advisers over £190m loan as MPs call for govt administration
(Sharecast News) - Lenders to troubled UK utility Thames Water's parent company have reportedly engaged accountancy firm EY as advisers weeks before a £190m debt falls due and MPs called for the company to be placed into special administration. Concerns are mounting within government about the company's survival, while the opposition Liberal Democrat Party demanded the company, which has piled up debts of £14bn, be placed into special administration.
Millions of Thames Water customers on Friday received their annual bill with eye-watering price rises of around 13% - more than three times the rate of inflation.
Sarah Olney, the Lib Dems' Treasury spokesperson, was set to call in a parliamentary debate the largest privatised English water company to be wound up under legislation that has recently been updated by ministers.
Thames Water wants a £2.5bn shareholder bailout to the end of the decade to stay solvent, but it has also held out the begging bowl to industry regulator Ofwat, demanding it be allowed to hit customers with a 40% price rise, pay its mostly-foreign owners higher dividends and be let off the hook for polluting rivers and streams by receiving lower fines.
Parent company Kemble Water has also received a £500m loan from shareholders.
"Thames Water is no longer a functioning company and the government has a choice: either bail them out with taxpayer money or put the company under new ownership to steady the ship," Olney said.
A £190m facility is due to be repaid or extended by the end of April, with the utility's bosses telling MPs in December that it was "not currently" able to repay the funding.
Thames Water serves 15 million customers across London and the southeast of England, and has come under intense pressure in recent years because of its poor record on leaks, sewage contamination, executive pay and shareholder dividends.
The appointment of EY was first reported by Sky News, without citing sources.
Reporting by Frank Prenesti for Sharecast.com
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