Dutch bank ING is key lender to Thames Water parent as cliff-edge looms

ING and a major Chinese institution are said to be among the financiers owed £190m by Kemble Water Finance at the end of this month as Thames Water faces into a financial abyss, Sky News learns.

The Dutch banking giant ING has been thrust into a pivotal role in determining the future of stricken Thames Water’s parent company amid growing expectations that lenders will agree a loan extension ahead of a repayment deadline this month. Sky News has learnt that ING is among the lenders due to be repaid £190m by Kemble Water Finance at the end of April. A large Chinese bank is also said to have a significant position in the loan facility, according to banking sources. The identity of the lenders has not previously been disclosed. If the loan is not repaid and Kemble Water Finance is in default, the company risks being forced into administration, deepening the crisis engulfing Britain’s biggest water company. Such a move would not, however, have any direct impact on the water and sewage services provided to 15 million Thames Water customers across London and southeast England. ING declined to comment on Thursday. Kemble has been left unable to repay the £190m loan amid a regulatory block on dividends being paid to it by Thames Water’s operating company. Sir Adrian Montague, the City grandee who was parachuted in as the utility’s chairman last year, admitted to MPs in December that it was not in a position to meet its obligations under the loan agreement. Industry insiders said, though, that they were cautiously optimistic the April 30 repayment deadline would be extended by the lending syndicate. Thames Water (Kemble) Finance said last week that it planned “to approach their lenders and noteholders and request continued support in order to provide a stable platform while they engage with all key stakeholders”. It added that Alvarez & Marsal had been hired to advise on these discussions. The simmering crisis at Thames Water erupted last week when Sky News exclusively revealed that its shareholders had decided not to proceed with a promised £500m equity injection into the company amid an impasse with Ofwat, the industry regulator. The two sides have been unable to agree on a business plan which generates sufficient financial returns for the investors – which include the Universities Superannuation Scheme, China’s sovereign wealth fund and a major Canadian pension fund – leaving Thames Water facing into a financial abyss.

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