(Dec 10): Thames Water Utilities Ltd said its debt pile grew to £15.8 billion (US$20.2 billion or RM89.08 billion) in the six months to October, as it warned it may not be able to continue operating without a cash injection.

The UK’s largest water and sewerage supplier said net debt increased from £14.7 billion at the end of March. The company’s gearing — the level of debt compared to equity — rose to 84.2% compared to 80.6% at the end of March, according to a statement on Tuesday.

Thames is in crisis and is battling to avoid being plunged into special administration. The company urgently needs to find equity after its shareholders refused to invest more money in March, declaring the company ‘uninvestible’. Next week, the regulator Ofwat will publish its final determinations on new regulation setting out returns for investors. Thames is banking on this being enough to attract new money.

The equity process is progressing and there has been “considerable interest” from investors, Chris Weston, chief executive officer of Thames, said on a call with reporters.

Weston said he was “comfortable” with the number of bids they had last week, adding that they were “credible parties” whom the company would continue to work with after Ofwat confirms its final decisions next week.

Indicative bids were due last Thursday with interest from Infrastructure investor Covalis Capital and Castle Water Ltd.

The utility wants regulator Ofwat to allow equity investors to receive a return of 5.7% for the next five years — much higher than the 4.8% Ofwat proposed in a draft ruling in July. A final decision is expected on Dec 19, and Thames may appeal to the Competition and Markets Authority if it’s unhappy with the outcome.

The company warned “material uncertainty” exists “which may cast significant doubt on the Group and Company’s ability to continue as a going concern” as it doesn’t “have sufficient committed liquidity to meet their liabilities as they fall due” over the next 12 months.

For now, Thames is still clinging on and currently has enough cash to last until March, after creditors agreed to release £0.5 billion in reserves.

The company is awaiting a court hearing next week to get approval for a £3 billion emergency loan from creditors. That would give it enough cash to last until September or October, depending on the results of the regulatory ruling next week.

Despite the turmoil, the company paid out £1.85 million in bonuses to executives compared to £888,000 for the same period last year.

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