Thames Water has been given a matter of weeks to convince Ofwat of a viable survival plan to tackle its looming debt pile, the regulator has reportedly said.
A new turnaround strategy must be presented to Ofwat before May 23, the Guardian reported, before a June 12 cut-off for the regulator’s so-called draft determinations, according to Reuters.
Approval will need to be secured for the London water supplier’s plan to raise consumer bills by 40%, in a bid to address some £16 billion worth of debt.
Thames Water has faced crisis and even potential nationalisation over the past year after the costs of servicing its debt pile have soared.
Last month, shareholders refused to offer funds to support the company, prompting it to likely default on bonds due later in April, in an apparent dispute with the regulator over hiking consumer bills to foot the cost.
Reports say Ofwat is concerned such plans would be unfair to customers, without a clear strategy on how management of the debt-laden business would be overhauled.
“We do not comment on speculation,” an Ofwat spokesperson commented.
“Ofwat is continuing to work on draft determinations that will be published in June.
“We will continue to monitor Thames Water as it seeks to turn around its performance for customers and the environment.”