The warning could not be starker. As things stand today Thames Water, a £20 billion company supplying a quarter of the British population including its capital, its King and its Prime Minister, will run out of money on March 24. From that date, little more than 70 days away, our biggest drinking water and sewerage business will be unable to service its £16 billion of debts — or pay its suppliers.
Thames will be in default on its borrowings, and its workers and contractors will have to down tools on essential work on its network of 32,000km of water mains and 109,000km of sewers, and hundreds of waste water treatment sites. In the ugly but, in this case, strangely apposite phrase so beloved of the financial services, Thames Water is perilously close to the end of its “liquidity runway”.
This bleak scenario is laid out in the legal documents lodged with the High Court last month as Thames Water bosses and advisers scrambled to put together an emergency funding package that buys it enough time to raise more money from investors and, finally, put itself on a sustainable financial footing.
With lawyerly understatement the court documents rightly conclude that without the deal, a default will “pose a number of significant risks for the Thames Water Group’s business, its customers and the environment as well as regulatory risks for TWUL (Thames Water Utilities Ltd) and its directors”.
In other words we will all be deep in the brown stuff that it is Thames Water’s job to clean up 365 days of the year.
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