WIREDGOV

Ofwat has today confirmed the implementation of commitments from Thames Water, effective immediately, to remedy its licence breach in losing its investment grade credit ratings. This follows a public consultation.

The commitments are built around four key elements:

• The appointment of an independent Monitor to report on the company’s progress, including against its transformation plan. The independent Monitor will report back to Ofwat frequently and be entitled to access to company information;
• Developing and delivering a suitable operational business plan to achieve turnaround;
• Taking the steps required to deliver an equity raise;
• New non-executive director board appointments.

These commitments will remain in place until the company regains two investment grade credit ratings.

Notes to Editors

Ofwat’s final decision document to accept enforceable undertakings given by Thames Water Utilities Limited (Thames Water) is available here.

These enforceable commitments, known as ‘undertakings’ are offered by Thames Water to Ofwat pursuant to Section 19 of the Water Industry Act 1991. Paragraph 26 of Condition P of the Licence provides that: “The Appointee (Thames Water) must ensure that it or any Associated Company which issues corporate debt on its behalf maintains, at all times, two Issuer Credit Ratings which are Investment Grade Ratings from two different Credit Rating Agencies, other than where Ofwat provides its written agreement for the Appointee to maintain only one Issuer Credit Rating which is an Investment Grade Rating.”