Thames Water and its lenders are spending millions of pounds a week on management consultants and bankers amid a cash crisis at the struggling utility company.
Britain’s biggest water supplier is scrambling to shore up its finances after its parent company, Kemble, defaulted on its debts and shareholders refused to provide new funding.
Taxpayers could be left to foot the bill if the Government has to bail out the debt-laden company, which has 16million customers.
Half a dozen firms are advising the beleaguered firm and its associates, it emerged yesterday. Kemble has reportedly hired turnaround firm Alvarez & Marsal to convince lenders to hand over more money.
Meanwhile, Big Four accounting firm EY is advising a group of Kemble lenders on recovering £190million, according to the Sunday Times.
Rothschild, the investment bank, has been hired to advise Thames Water on how to deliver its reform plan, while consultancy firm Teneo has been appointed as ‘administrator in waiting’ to take over in the event of a collapse.
The utility, which provides water to millions of households in London and the South East, risks falling into special administration if it cannot find extra funds.
It brought in restructuring firm AlixPartners last year to advise on plans, and law firm Slaughter and May was hired to advise on financing proposals.
This comes amid public outrage over Thames Water and the wider industry’s poor customer service, and sewage leaks into rivers and waterways.
Thames Water had looked for fresh funding from its shareholders but that was dependent on water regulator Ofwat approving its turnaround plan, which included a 40 per cent rise to customers’ bills.
Ofwat blocked the increase and refused to ease capital spending requirements and waive fines for not meeting targets. Thames Water declined to comment.
