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Castle Water vows to create 2,000 jobs thames Water if it gains control of the struggling supplier, as part of a new approach that also offers an additional £1bn cash injection on top of current offers.
The utility firm has returned with an improved offer for Thames, which is in advanced talks with creditors and regulators to secure funding that prevents nationalisation.
Castle Water was one of the companies that approached Thames about a potential deal earlier this year.
Its initial bid was rejected in favor of proposals from investment group KKR, which later pulled out of the bidding.
Thames is currently negotiating with a consortium of its main creditors named London and Valley Water, which has presented a plan to increase investment in the utility and forgive debt in exchange for more generous performance targets.
Meanwhile, Castle Water says its alternative plans would provide a cash injection of at least £1bn on top of existing proposals backed by the billionaire Pearse family’s property group.
The PA news agency believes that if a bid was successful, it would lead to a 25% increase in spending as well as the creation of 2,000 jobs, including engineers, scientists and operational staff.
The sweet offer also includes a commitment to repair and expand capacity of waste treatment plants to reduce pollution.
Castle Water is co-owned by Conservative Party Treasurer Graham Edwards and says it is the largest independent water retailer in the UK.
Its chief John Reynolds said in an interview with The Times that he was “confident” that the turnaround plan would solve pollution problems in the Thames.
He also said he believed discussions between Thames and its lenders and investors were stalling due to the nature of its proposals.
However, a spokesperson for the lenders said it was “absolutely not true that discussions have stopped”.
,thames water London & Valley Water said it “urgently needs £5 billion of funding from committed and experienced new investors to deliver better outcomes for its customers and employees.”
“We are working hard to find a solution as quickly as possible.”
It is understood that discussions had slowed down before the autumn Budget on November 26, after which talks with the Treasury on the proposals are expected to accelerate.
The consortium is hoping to finalize a rescue deal before Christmas.
It has vowed to forgive about £4 billion, or 25% of its debt held by Thames, as well as debt owed by other creditors.
The lenders said they were investing an additional £1 billion, in addition to the proposal submitted to the regulator, including an additional £150 million of new equity. Fear In May.
However, the proposal comes with an effective ultimatum for Ofwat to accept renegotiated targets on pollution incidents and water leakage in return for investment.
A Thames spokesman said discussions were ongoing.
“Discussions are ongoing between TWUL (Thames Water Utilities Limited) senior creditors, the London and Valley Water Consortium, Ofwat and other regulators regarding a potential market-based solution for the recapitalization of the company.
“TWUL is focused on providing a recapitalization transaction that serves its clients and the environment as quickly as possible.”