What does Thames Water’s latest disgrace – top billing in a multi-year, multi-company sewage scandal, as finally detailed by the regulator, Ofwat, on Tuesday – mean for its great refinancing challenge?
At one level, you could say it makes little difference. A £104m penalty is close to the maximum under Ofwat’s powers, but is a rounding error in the context of borrowings of £15.2bn in the regulated entity. Since the board has known what was coming for months, one assumes the sum was included in last month’s calculation that there is enough cash to keeping going until next May. In any case, a separate potential criminal investigation by the Environment Agency for the same sewage failings is probably the bigger financial threat.
