July 10 (UPI) -- Investors of Britain's embattled Thames Water utility agreed Monday to pump in an extra $960 million of equity funding for the current investment round ending 2025 to help stabilize the company as it grapples with an $18 billion debt mountain.
The funding was subject to the preparation of a business plan that underpins "a more focused turnaround that delivers targeted performance improvements for customers, the environment and other stakeholders" over the next three years, supported by appropriate regulatory arrangements, Thames Water said in a news release.
Shareholders in the London Stock Exchange-listed company were providing the funds with the understanding that another $3.2 billion will be required during the upcoming -- 2025-2030 -- water sector investment cycle to further improve operational performance and financial resilience, the company added.
"Our shareholders have consistently been very supportive of Thames Water by approving investment in the business over and above regulatory allowances, foregoing any income since 2017 and investing $638 million of new equity funding in March 2023," said Thames Water Chairman Ian Marchant.
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"The additional investment announced today is the largest equity support package ever seen in the U.K. water sector and underscores our shareholders' commitment to delivering Thames' turnaround and life's essential service for the benefit of our customers, communities, and the environment."
Thames Water's principal investors are pension and sovereign wealth funds ranging from BT Group's pension scheme and Canada's OMERS pension fund for Ontario public workers to the China Investment Corporation, which manages the country's $3.2 trillion foreign exchange reserves.
The company reiterated that it continues to maintain a "strong liquidity position," including $5.6 billion in cash and credit lines, as of March 31, 2023, sufficient to cover all anticipated costs through the end of 2024 and into 2025.
Calling it a "major milestone" for Thames Water, joint interim CEOs Cathryn Ross and Alastair Cochran, said the new funding was the result of a year-long endeavor with investors to develop a viable long-term business plan.
"The substantial equity support package announced today will underpin the delivery of a more focused turnaround plan that builds on the foundations that have been put in place over the last two years and focuses expenditure on a smaller number of initiatives, which will deliver material and sustainable improvements in key performance metrics over the next three years," said Ross and Cochran.
Thames has been fighting for its future amid growing public dissatisfaction with the company that serves 15 million homes and businesses in London and the southeast.
Leaks from its pipelines are at a five-year high and it has been prosecuted multiple times for sewer flooding and dumping untreated sewage into rivers.
Two weeks ago ministers, the Treasury and Ofwat, the industry regulator, were reportedly in exploratory talks to temporarily nationalize Thames Water under a so-called "special administrative regime" if investors failed to come up with the emergency funding and the company collapsed.
