Britain's Thames Water said on Friday it needed creditors to allow it to release more cash reserves as it runs short of time in its struggle to raise the capital it needs to survive.
The company, which supplies a quarter of the population with water, stated earlier this year that it needs to raise equity of 3.25 billion pounds ($4.3 billion) over the next five years. Without new investment it said it would run out of money by May 2025.
A formal process to raise new equity would be launched in the coming weeks, Thames Water said, although it added that it was not expected to conclude until after the water regulator had made a final decision on future tariffs, possibly in January.
Given the short time frame, Thames Water said it was undertaking contingency planning.
"We have entered into discussions with our financial stakeholders to release cash reserves under our financing. This would require majority creditor consent," the company said.
Thames Water, Britain's biggest water company has been teetering on the brink of collapse since its investors called the company "uninvestible" in March, blaming the regulator for not allowing it to increase water bills sufficiently.
Britain's privatised water industry has come under fire after companies increasingly released sewage into rivers and seas, causing public outrage that for decades the utilities had prioritised profit over investment.
Thames Water said if its creditors do not let it draw on the 380 million pounds of cash it needs in reserves under its financing arrangement, and it cannot access 420 million pounds of Class A and Class B undrawn committed facilities, it could run out of cash at the end of December.
It also has a further 550 million of undrawn reserve liquidity facilities available should it enter standstill, where secured creditors agree not to demand repayment.
"We, together with our financial stakeholders, are considering options for the extension of our liquidity runway to enable time to complete a recapitalisation transaction," the company said on Friday.
That refers to a separate process by Thames Water to try to restructure its debt, for which the company has reserved court dates in November.
Thames Water said it had 1.57 billion pounds of liquidity on Aug. 31.
($1 = 0.7507 pounds)
