Thames Water - comment

As the company & its advisers, Rothschild continue to engage with potential investors on a £3.3 billion rights issue in parallel to a creditor-led restructuring solution, it appears another set of infrastructure investors - Brookfield Infrastructure Partners, Global Infrastructure Partners (a Blackrock subsidiary) and Stonepeak have been approached to gauge their appetite for a transaction in the situation. Thames Water needs visibility on investor interest for a rights issue by early November, however, fundraising efforts are complicated by the fact that Ofwat is only planning to finalise its decision on business plan and water prices by December. In either scenario, any new money provider will want some haircut to the existing debt structure, including the Class As. Given the timetable, if the company gets a fully subscribed rights issue at the same time as a restructuring proposal from existing creditors, it may even have the luxury of choosing the best solution…time will tell.