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UTILITIES: Thames Water (THAMES Ba2[N]): Owfat Commitments

UTILITIES
  • Having lost its IG ratings thereby breaching license agreements, Thames Water has been given a new set of conditions by Ofwat.
  • These are largely in line with the oversight regime raised in the draft determination; an independent monitor, delivering a turnaround buiness plan, new non-executive directors.
  • Finally, they are required to take the steps necessary to deliver an equity raise. This seems a moot point with management already trying to do so, however unlikely as things stand. With no further details on how it is supposed to do so this doesn’t really add anything new unless more forceful measures are in play behind the scenes. Debt restructuring remains the elephant in the room.

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