Saturday 14 December 2019 4:01 pm

Thames Water hires advisers on £12bn debt ahead of crucial Ofwat ruling

Thames Water has called in advisers ahead of Ofcam price settlement

Thames Water has hired restructuring experts from Gleacher Shacklock ahead of a crucial ruling from industry watchdog Ofwat.

The UK’s biggest water supplier has called in the experts to advice on its £12bn pile of debt amid concern about the impact of a regulatory crackdown on its finances, according to Sky News.

Thames Water was left dismayed by Ofwat’s proposal the company spend up to £9.3bn during the next regularity period – less than the £11bn it had hoped.

It will be one of a number of water suppliers considering appealing to the Competition and Markets Authority (CMA) if they regard Monday’s price settlement as too drastic.

Ofwat wants to cut customers water bills by £50 per year on average despite the £12bn’s worth of investment planned up until 2025.

Final price determinations will be accompanied by performance commitments that Thames Water must make in relation to leakages and help for the most vulnerable.

It will also include penalty payments and incentives to hit targets.

Earlier this year Ofwat approved spending plans for three UK water companies but dismissed 14 more.

Chief executive Steve Roberston was ousted following a a string of poor performances and incidents, which included a £20m fine for dumping raw sewage into the River Thames in 2017.

Basil Scarsella, chief executive of UK Power Networks (UKPN) is the front-runner to replace Roberston according to Sky News.

Thames Water’s most recent annual report showed it had debt worth £11.73bn at the end of March as well as a regulatory capital value of £14bn.

It means an unfavourable pricing settlement could limit the company’s future borrowing capacity as it tries to improve its disappointing leakage record.

It is currently unclear what options are available to Thames Water as it consults with financial advisers.

Thames Water has so far declined to comment.