South East Water has issued a call for increased investor funding as it faces significant financial uncertainty, reports BBC.
The utility company, which serves approximately 2.3 million customers across Kent, Sussex, Surrey, Hampshire, and Berkshire, disclosed in its latest financial statement that it is actively engaged in discussions with both lenders and shareholders. The announcement comes as South East Water remains under scrutiny by Ofwat, alongside Thames Water, for its financial vulnerability.
“If it is not possible to raise the additional liquidity, the group and therefore company would not have sufficient liquidity for the going concern period,” the company's statement revealed. The firm mentioned that these talks are at an "advanced" stage and that its directors are optimistic about securing the necessary additional funds. However, a concrete agreement has yet to be finalised.
The company’s statement also highlighted: “The risk that the funding will not be received constitutes a material uncertainty that may cast significant doubt on the ability of the group and company to continue as a going concern.”
South East Water's proposal includes a significant increase in spending to £1.9 billion, partly funded by a 22% hike in customer bills, to ensure the maintenance and upgrade of its infrastructure. Despite these plans, the company's financial performance has shown some improvement, with pre-tax losses reduced to £36 million for the year ending 31 March, compared to a £74 million loss the previous year.
Compounding its challenges, South East Water is also under investigation by Ofwat following prolonged water supply interruptions affecting thousands of customers in Kent and Sussex. The company stated it has "entered into a constructive and transparent dialogue" with the regulator since the investigation began.
In a statement, South East Water extended an apology to affected customers: "We'd like to apologise to customers who experienced supply interruptions."
