Britain’s largest water supplier faces nationalization risk as financial crisis worsens

Thames Water supplies water to more than 15 million homes and businesses (representative)

Debt-ridden Thames Water revealed on Thursday it had failed to raise a major cash injection from shareholders and blamed industry regulations for making its rescue plan “uninvestable”.

Thames Water shareholders will not provide 500 million pounds ($630 million) in new equity this month, Britain’s largest water supplier said in a statement.

The company added that it was in “ongoing” talks with industry regulator Ofwat over a scheme that would be “affordable for customers, deliverable and financeable by Thames Water and investable by equity investors”.

The cash is the bulk of a £750m financing lifeline agreed with investors last July.

Ofwat refused to give in to Thames Water’s demands for concessions, which it said included a 40% rise in water bills, which would worsen the country’s cost of living crisis, the domestic Press Association news agency said.

Other concessions reportedly include relaxed capital spending requirements and lenient regulatory penalties.

Ofwat said on Thursday Thames Water would need to find other financial solutions but stressed customers would not be affected.

An Ofwat spokesman said: “Whatever issues Thames Water shareholders face, we have safeguards in place to ensure services to customers are protected.”

“Today’s update… means the company must now explore all options to seek more equity in the business to turn around the company’s performance for its customers.”

Thames Water, which supplies water to more than 15 million homes and businesses in London and other parts of southern England, is saddled with nearly £15 billion in debt and is at risk of being nationalized.

The organization has also faced fierce criticism for failing to meet targets to reduce leaks and reduce sewage discharge into rivers despite significant infrastructure investment.

England’s stormwater drains overflowed with sewage in record numbers last year, official statistics showed on Wednesday, angering campaigners who want cleaner rivers and seas.

Environmentalists are increasingly expressing anger at increasing pollution of Britain’s beaches and waterways and are targeting privatized water companies.

In another development on Thursday, researchers revealed that high levels of E. coli, a type of bacteria found in human waste, were found in a stretch of London’s Thames River that is set to show up this year. During the weekend’s Oxford and Cambridge Boat Race.

The bacteria was found in water near Hammersmith Bridge in west London, according to tests carried out by anti-pollution campaign group Action Rivers and Fulham Ridge Rowing Club.

The annual rowing race features rowing teams from two of England’s oldest universities, Cambridge and Oxford. It will be held this Saturday.

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