Thames Water faces bondholder pressure amid default fallout

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TMT Reporter

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Thames Water was recently allowed to hike bills by 35 per cent by 2030.
Thames Water was recently allowed to hike bills by 35 per cent by 2030.

Amid mounting financial uncertainty at Thames Water, a consortium of bondholders has issued a formal request for a meeting with the company’s management.

The group, which claims ownership of more than £5bn in Thames Water bonds, outlined their demands in a letter from advisers legal firm Akin Gump and investment bank Jefferies, obtained by the Financial Times.

Citing alarming “press reports” alluding to possible “material impairment” of their holdings, the bondholders have insisted on direct contact with Thames Water’s top brass.

Following the recent default by Kemble Water Finance, concern has rippled through the ranks of Thames Water’s lenders, with fears of potential writedowns on the utility’s massive £16bn debt.

The looming prospect of debt impairment, once considered remote given the robust financial structure, has aggravated investors and heightened tensions.

No longer satisfied with periodic investor calls or written updates, they are pushing for a face-to-face meeting within the week.

“We must insist that the company and its advisors make themselves available for a meeting with Akin and Jefferies,” the bondholders’ representatives wrote in the letter sent on Thursday. It was also addressed to Thames Water’s advisers, Rothschild and Linklaters.

The bondholders argued it is “vital” they are involved in any key decisions like new fundraising or a break-up of the group.

Thames Water has declined to comment.

The embattled company, responsible for servicing a large portion of England and Wales including 16m in London, is battling challenges in modernising its infrastructure. This has been compounded by regulatory disputes over funding and consumer tariffs.