Thames Water says needs more time for financial turnaround
Source: AFP
Struggling UK utility firm Thames Firm needs more time to turn around its fortunes after announcing a slump in profits and mounting debt, one of its bosses said Tuesday.
The country's biggest water supplier has previously announced a three-year plan to improve its operational and financial performance.
But joint interim chief executive Alastair Cochran said: "This turnaround will take some time and we won't completely complete the job in three years.
"We do believe we have a comprehensive plan in place to deliver material benefits to our customers," he told a parliamentary committee.
The Environment, Food and Rural Affairs Committee called a number of Thames Water bosses to give evidence about its debts.
Thames Water supplies 15 million customers in London and the Thames Valley area of southeast England and has net debts of nearly £15 billion ($19 billion).
Last week the company said its profit after tax tumbled 57 percent to £172.3 million in the six months to the end of September.
Its precarious financial situation worried the government so much earlier this year that it fuelled speculation about a possible public rescue plan.
"We were very fragile in July," chairman Adrian Montague told the MPs.
"The chief executive resigned without notice 10 days before a change of chairman. The financial markets took fright.
"We have stabilised the business. We have finalised our business plan. We have raised more money. We've got a turnaround plan. There is a process under way to try to identify a new chief executive.
"We need to make a fresh shot."
In July, Thames Water received assurances of £750 million of new shareholder funding between now and 2025, short of the £1 billion it was seeking on top of the £500 million it secured in March.
Thames, which blames its situation on regulatory limits on price increases for customers, says it would need a further £2.5 billion of support between 2025 and 2030.
It also wants its creditors to extend the maturity on a debt of £190 million, which matures in April next year.
The UK's water companies have been criticised for a number of years for wastewater discharges into rivers and the sea because of a lack of investment in upgrading sewage networks, many of which date from the 19th century.
Improvements will cost billions but the firms have accumulated more than £60 billion in debt since they were privatised in 1989 under prime minister Margaret Thatcher.
Source: AFP
