Thames Water will likely end up paying around £200 million ($248 million) to advisers by the middle of this year, as the firm looks to find an equity investor and cut its liabilities.
The struggling utility, which supplies almost a quarter of the UK with water and sewage services, has already paid a sum between £100 million and £120 million to advisers looking to either help the firm shed debt or find a new owner, Chief Financial Officer Alastair Cochran told a London court on Tuesday. The company also expects to pay out another £90 million to such advisers over the next six months, Cochran said.
The eye-watering figures show the scale of the crisis Thames finds itself within, as well as the amount of money law and advisory firms stand to make. The company, which is a regional monopoly funded by customer bills, is struggling under more than £16 billion of debt and risks running out of money by the end of March. Thames is asking a London court to approve a plan that would enable the firm to borrow another £3 billion from its creditors to stave off insolvency.
Rothschild & Co. has been hired to run the bidding process for Thames Water. There are also a large number of lawyers and financial advisers working on restructuring the company’s debts, something that will likely drag on into at least the second half of this year.
Cochran, who has been chief financial officer at Thames since 2021, expects interest payments to be around £800 million to £900 million a year. Cochran was being cross-examined by a lawyer acting for Charlie Maynard, a UK politician that has appeared before the court saying that a temporary nationalization — through a process called a special administration — of the firm would be in the public interest.