- Extra 750 mln stg to fund turnaround
- Company had wanted 1 bln stg
- Will need 2.5 bln stg 2025-2030
- Gearing falls to 77%
- FY revenue up 4% to 2.3 bln stg
LONDON, July 10 (Reuters) - Thames Water said on Monday its investors had agreed to pump 750 million pounds ($960 million) into Britain's biggest water company but the troubled business warned it would need even more new equity in the years ahead.
Thames Water, weighed down by 14 billion pounds of debt and under pressure over its environmental record, had told shareholders it needed 1 billion pounds to help fund its turnaround.
British ministers have been monitoring Thames Water amid fears it could need a government rescue if shareholders refused to invest more. It serves around 15 million customers or more than a fifth of Britain's population.
While the extra equity announced on Monday will help stabilise the balance sheet, Thames Water warned that over the 2025-2030 period it would need further equity in the region of 2.5 billion pounds.
"Shareholders have also acknowledged that delivery of the turnaround plan is likely to require the provision of further equity support," Thames Water said.
Worries over its financial viability surfaced in late June, when its CEO abruptly quit and it brought in new interim co-chief executives and a new chairman, aimed at hastening the turnaround following regular sewage releases from creaking infrastructure.
The 750 million pound investment is subject to Thames Water improving the business plan underpinning its turnaround, it said.
"The additional investment announced today is the largest equity support package ever seen in the UK water sector and underscores our shareholders' commitment to delivering Thames' turnaround," Chairman Ian Marchant said in a statement.
Thames Water's owners include Ontario Municipal Employees Retirement System, the UK's Universities Superannuation Scheme and China Investment Corp.
The company also published its results on Monday for the year to the end of March, which showed its gearing level fell to 77% from over 80%. Core earnings (EBITDA) fell 3% to 1.1 billion on revenue which grew 4% to 2.3 billion pounds.
($1 = 0.7812 pounds)
Reporting by Sarah Young; Editing by Kate Holton
Source: Reuters