Thames Water is poised to unveil a rescue plan this week as it scrambles to shore up its finances and stave off nationalisation.
Board members at the struggling utility company are due to meet on Thursday, with a fresh five-year spending plan expected to be published on Friday.
The company’s proposals are understood to include a debt raise as it hunts for new cash to secure its future.
However, any attempt to return to debt markets would raise eyebrows as Thames struggles under a debt pile of £18bn.
Its parent company Kemble has already defaulted on a £400m loan, while it has warned it will miss a deadline to repay £190m to lenders at the end of the month.
Thames has been plunged into crisis since shareholders refused to pump £500m into the business amid a row with regulator Ofwat.
The investors – a consortium of pension funds and foreign states – said Ofwat had left the company “uninvestible” after refusing to allow substantial bill increases.
In its original business plan published in October, Thames said it wanted to raise bills by around 40pc to fund an £18.7bn investment programme.
However, this figure is expected to increase in the updated plan. It is not clear how much of the additional funds would be raised through debt.
Thames is racing to find fresh cash to shore up its balance sheet, as well as to tackle operational issues including leaks and sewage skills.
Bosses have pointed out that it still has £2.4bn of liquidity available. But that cash pile could quickly shrink given the prospect of growing debt finance costs and looming fines from Ofwat.
Executives are now discussing a radical break-up plan in a bid to stave off the looming threat of nationalisation.
Under the proposals being considered, Thames, which serves 16 million customers, could hive off its London operations from those serving the Thames Valley and Home Counties areas.
Ofwat is due to publish its draft response to Thames’s business plan, which covers 2025 to 2030, on June 12.
Chancellor Jeremy Hunt last week said it would be “utterly outrageous” for Ofwat to allow Thames to raise household bills.
Speaking at a public meeting in his South West Surrey constituency, Mr Hunt said the company had “an obligation to sort out the mess”.
Thames Water declined to comment.
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