Latest news with #SteveReed
Times
6 hours ago
- Business
- Times
Thames Water given special administration warning by minister
The government has given the strongest indication yet that it is preparing to put Thames Water into administration. Answering questions in the Commons, Steve Reed the environment secretary, was asked to comment on backbench unease that a consortium plotting a takeover of Thames Water is lobbying Ofwat, the regulator, to ease up on the fines and penalties it is levying against the company for past misdemeanours and ongoing poor performance. In response Reed told MPs: 'Thames Water must meet its statutory and regulatory obligations to their customers and to the environment. It is only right that the company is subject to the same consequences as any other water company.' He continued: 'The company remains financially stable but we've stepped up our preparations and stand ready for all eventualities, as I've said before, including [a] special administration regime if that were to become necessary.' A special administration regime is the option of last resort for the troubled company and would involve the appointment of professional accountants and be likely to wipe out all creditors in an attempt to refinance the business. A consortium of creditors of Thames Water who are already propping up the £19.25 billion in-debt London and Thames Valley supplier, have proposed a £5 billion refinancing over and above £3 billion of bridging loans that are currently keeping the company in business. However, those creditors have made it plain that their proposals can work only if Ofwat is prepared to offer a 'recalibration' of Thames Water's five-year funding settlement and performance targets. As the settlement currently stands, which demands reductions in environmentally-damaging pollution incidents and wasteful mains leakage plus other metrics, Thames could face up to £1 billion of fines and penalties for not hitting the targets in the coming years. The creditors plotting the takeover include major UK institutions such as Aberdeen, Invesco and M&G, large international finance houses such as BlackRock and Apollo, as well as distressed-debt dealers such as Elliott and Silver Point Capital. They have stepped in after the infrastructure investment arm of KKR, the American private equity house, walked away last month from a £4 billion recapitalisation plan. A spokesman for the creditors backing the takeover said: 'Broad regulatory support is needed to unlock a market-led solution for Thames Water that will secure billions of pounds in fresh investment for its ageing network. 'This investor group is committed to working with the government and regulators to agree a pragmatic plan that recognises what Thames Water can realistically deliver and they expect to be held accountable for an ambitious trajectory for the company's return to compliance. 'More than £10 billion would be written-off to get the company back to investment grade, expected to be the largest financial loss on an infrastructure asset in British history.'
The Independent
8 hours ago
- Business
- The Independent
Government will not be lenient with Thames Water creditors, suggests Reed
Environment Secretary Steve Reed has suggested that the Government will reject calls from Thames Water creditors for leniency from fines and penalties. Taking questions in the Commons on Tuesday, Mr Reed said the Government had 'stepped up our preparations and stand ready for all eventualities', amid Thames Water's search for a rescue plan. The troubled utility company's lenders put forward proposals to pump cash into it. But they have also demanded leniency from regulators over performance targets and fines for environmental failings. The creditors argue that without regulatory leniency, the utility's 'pollutions, asset health deterioration, and customer service levels are likely to worsen'. Labour MP for Monmouthshire, Catherine Fookes, told the Commons: 'I am really concerned by reports of Thames Water seeking regulatory easements. 'Can the Secretary of State assure me that this Government will continue to crack down on water pollution from all sources, including in the Wye and the Thames and all across the UK?' Mr Reed replied: 'The Government will always act in the national interest on these issues. 'Thames Water must meet its statutory and regulatory obligations to their customers and to the environment. 'It is only right that the company is subject to the same consequences as any other water company. 'The company remains financially stable, but we've stepped up our preparations and stand ready for all eventualities, as I've said before, including a special administration regime if that were to become necessary.' It comes after US private equity giant KKR recently pulled out of a rescue deal to inject much-needed cash into Britain's biggest water supplier, which has 16 million customers and is sinking under £19 billion of debt. The move threw the future of Thames Water into doubt once more and raised the threat of temporary nationalisation by the Government if a deal cannot be agreed. A Thames Water spokesperson said: 'Thames Water is committed to improving outcomes for the environment and its customers. 'We are investing billions of pounds in our network and any recapitalisation of the business will need to ensure that is maintained for the benefit of all our stakeholders. 'Our focus remains on a holistic and fundamental recapitalisation, delivering a market-led solution which includes targeting investment grade, credit ratings.' The creditors are the bondholders who now effectively own Thames Water after the High Court, earlier this year, approved a financial restructuring through a loan of up to £3 billion to ensure it can keep running until the summer of 2026. As part of their plans, the creditors would commit to spending £20.5 billion over the next five years, as agreed under the current five-year plan with Ofwat. But they are calling for a 'pragmatic approach' to regulation – including 're-basing incentives and performance targets' – and 'realistic levels of compliance'. It is understood they have been holding intensive talks with regulator Ofwat in the hope of securing approval for their deal in early July. A spokesman for the creditors said: 'Broad regulatory support is needed to unlock a market-led solution for Thames Water that will secure billions of pounds in fresh investment for its aging network, allowing a world class leadership team to start the intensive turnaround and deliver better outcomes for customers and the environment. 'This investor group is committed to working with the Government and regulators to agree a pragmatic plan that recognises what Thames Water can realistically deliver and they expect to be held accountable for an ambitious trajectory for the company's return to compliance. 'More than £10 billion would be written off to get the company back to investment grade, expected to be the largest financial loss on an infrastructure asset in British history.'
Yahoo
8 hours ago
- Business
- Yahoo
Government will not be lenient with Thames Water creditors, suggests Reed
Environment Secretary Steve Reed has suggested that the Government will reject calls from Thames Water creditors for leniency from fines and penalties. Taking questions in the Commons on Tuesday, Mr Reed said the Government had 'stepped up our preparations and stand ready for all eventualities', amid Thames Water's search for a rescue plan. The troubled utility company's lenders put forward proposals to pump cash into it. But they have also demanded leniency from regulators over performance targets and fines for environmental failings. The creditors argue that without regulatory leniency, the utility's 'pollutions, asset health deterioration, and customer service levels are likely to worsen'. Labour MP for Monmouthshire, Catherine Fookes, told the Commons: 'I am really concerned by reports of Thames Water seeking regulatory easements. 'Can the Secretary of State assure me that this Government will continue to crack down on water pollution from all sources, including in the Wye and the Thames and all across the UK?' Mr Reed replied: 'The Government will always act in the national interest on these issues. 'Thames Water must meet its statutory and regulatory obligations to their customers and to the environment. 'It is only right that the company is subject to the same consequences as any other water company. 'The company remains financially stable, but we've stepped up our preparations and stand ready for all eventualities, as I've said before, including a special administration regime if that were to become necessary.' It comes after US private equity giant KKR recently pulled out of a rescue deal to inject much-needed cash into Britain's biggest water supplier, which has 16 million customers and is sinking under £19 billion of debt. The move threw the future of Thames Water into doubt once more and raised the threat of temporary nationalisation by the Government if a deal cannot be agreed. A Thames Water spokesperson said: 'Thames Water is committed to improving outcomes for the environment and its customers. 'We are investing billions of pounds in our network and any recapitalisation of the business will need to ensure that is maintained for the benefit of all our stakeholders. 'Our focus remains on a holistic and fundamental recapitalisation, delivering a market-led solution which includes targeting investment grade, credit ratings.' The creditors are the bondholders who now effectively own Thames Water after the High Court, earlier this year, approved a financial restructuring through a loan of up to £3 billion to ensure it can keep running until the summer of 2026. As part of their plans, the creditors would commit to spending £20.5 billion over the next five years, as agreed under the current five-year plan with Ofwat. But they are calling for a 'pragmatic approach' to regulation – including 're-basing incentives and performance targets' – and 'realistic levels of compliance'. It is understood they have been holding intensive talks with regulator Ofwat in the hope of securing approval for their deal in early July. A spokesman for the creditors said: 'Broad regulatory support is needed to unlock a market-led solution for Thames Water that will secure billions of pounds in fresh investment for its aging network, allowing a world class leadership team to start the intensive turnaround and deliver better outcomes for customers and the environment. 'This investor group is committed to working with the Government and regulators to agree a pragmatic plan that recognises what Thames Water can realistically deliver and they expect to be held accountable for an ambitious trajectory for the company's return to compliance. 'More than £10 billion would be written off to get the company back to investment grade, expected to be the largest financial loss on an infrastructure asset in British history.'
Telegraph
10 hours ago
- Business
- Telegraph
Environment Secretary steps up plans to nationalise Thames Water
The Environment Secretary has said the Government is stepping up plans to temporarily nationalise Thames Water after a US rescue bid collapsed. Steve Reed confirmed to Parliament on Thursday that ministers were ready to save the struggling utility giant if necessary. A rescue would be in the form of a taxpayer-backed special administration scheme. He said: 'The company remains financially stable, but we've stepped up our preparations and stand ready for all eventualities, as I've said before, including a special administration regime if that were to become necessary.' A government intervention appears increasingly likely after US private equity giant KKR abandoned a bid for the company. Thames's creditors have proposed an alternative £17bn rescue plan but it is contingent on regulators agreeing to waive historical fines. They have been pushing for ministers to intervene on the matter. Mr Reed signalled this would not happen, casting doubt over hopes of a private sector-led solution. He said: 'Thames Water must meet its statutory and regulatory obligations to their customers and to the environment. It is only right that the company is subject to the same consequences as any other water company.' Taking control of Thames would pile further strain on the Government's stretched finances. A previous report estimated that a state bailout would cost the taxpayer up to £4.1bn. Thames, which has 16m customers across London and the South East, has been pushed to the brink of collapse as it struggles under the weight of £16bn in debts. Creditors have said that a 'regulatory reset' is needed to ensure the company is financially viable. A source close to the lenders said they were urging regulators 'not to reach back into history' and instead focus on Thames Water's turnaround efforts moving forward. A senior figure involved in the talks told The Telegraph last week: 'I think what it takes is the Government and the regulator coming together – it needs the Environment Department, the Treasury, and even No 10 to say, 'What's the least worst outcome here?'' Thames Water was handed a record fine of £123m in May and the company could be on the hook for more than £1bn in pollution and environmental failing penalties in future, according to creditors. The £17bn support package proposed by creditors includes writing off several billion pounds of debt and an immediate £3bn cash injection. If their deal falls apart, special administration is the most likely outcome for Thames. A spokesman for the creditors said: 'This investor group is committed to working with the Government and regulators to agree a pragmatic plan that recognises what Thames Water can realistically deliver and they expect to be held accountable for an ambitious trajectory for the company's return to compliance. 'More than £10bn would be written off to get the company back to investment grade, expected to be the largest financial loss on an infrastructure asset in British history.'
Yahoo
11 hours ago
- Business
- Yahoo
Environment Secretary steps up plans to nationalise Thames Water
The Environment Secretary has said the Government is stepping up plans to temporarily nationalise Thames Water after a US rescue bid collapsed. Steve Reed confirmed to Parliament on Thursday that ministers were ready to save the struggling utility giant if necessary. A rescue would be in the form of a taxpayer-backed special administration scheme. He said: 'The company remains financially stable, but we've stepped up our preparations and stand ready for all eventualities, as I've said before, including a special administration regime if that were to become necessary.' A government intervention appears increasingly likely after US private equity giant KKR abandoned a bid for the company. Thames's creditors have proposed an alternative £17bn rescue plan but it is contingent on regulators agreeing to waive historical fines. They have been pushing for ministers to intervene on the matter. Mr Reed signalled this would not happen, casting doubt over hopes of a private sector-led solution. He said: 'Thames Water must meet its statutory and regulatory obligations to their customers and to the environment. It is only right that the company is subject to the same consequences as any other water company.' Taking control of Thames would pile further strain on the Government's stretched finances. A previous report estimated that a state bailout would cost the taxpayer up to £4.1bn. Thames, which has 16m customers across London and the South East, has been pushed to the brink of collapse as it struggles under the weight of £16bn in debts. Creditors have said that a 'regulatory reset' is needed to ensure the company is financially viable. A source close to the lenders said they were urging regulators 'not to reach back into history' and instead focus on Thames Water's turnaround efforts moving forward. A senior figure involved in the talks told The Telegraph last week: 'I think what it takes is the Government and the regulator coming together – it needs the Environment Department, the Treasury, and even No 10 to say, 'What's the least worst outcome here?'' Thames Water was handed a record fine of £123m in May and the company could be on the hook for more than £1bn in pollution and environmental failing penalties in future, according to creditors. The £17bn support package proposed by creditors includes writing off several billion pounds of debt and an immediate £3bn cash injection. If their deal falls apart, special administration is the most likely outcome for Thames. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
