(Bloomberg) -- Thames Water Ltd. has until June 12 to gain the support of both the regulator and its shareholders to roll out a £2.5 billion ($3.1 billion) business plan designed to tackle chronic leaks and sewage spills.

The troubled water utility, which supplies a quarter of the people in England, is in crisis after its parent company Kemble Water Holdings Ltd. last month refused to inject any more money into the business, blaming restrictive regulation from Ofwat. Kemble then defaulted on its debt a week later after failing to make an interest payment.

The row centers on Thames’s five-year business plan to 2030, which is currently being scrutinized by Ofwat as part of a regulatory process known as PR24. Thames has proposed to increase customer bills by a hefty 40% starting in 2025, and has asked Ofwat for leeway on rules covering the cost of capital, dividend payouts and the return on equity for investors.

Ofwat has yet to publicly comment on the business plan, with all conversations happening behind closed doors. But on Monday it confirmed it would issue its draft determination for the plan on Wednesday, June 12. The Guardian newspaper reported that Thames must present the new strategy before Ofwat’s board meeting on May 23.

Thames Chief Executive Officer Chris Weston has said the utility will work to amend its business plan ahead of Ofwat’s draft determination. Once that decision is published, Thames will try again to convince existing shareholders to provide new equity, or failing that, would “go to the market” to seek new equity. That could include an initial public offering.

Thames has £16 billion of debt and needs more than £2.5 billion in equity to deliver on its plans out to the end of the decade. It says it has enough cash to survive until the end of July 2025. 

Prime Minister Rishi Sunak’s government has prepared to take Thames Water into special administration by updating its insolvency rules for water companies at the start of this year. 

However, ministers have sought to distance themselves from the crisis. Kemble investors asked Environment Secretary Steve Barclay to intervene in recent weeks after they learned that industry watchdog Ofwat didn’t support Thames’s business plan. But Barclay wrote back refusing to get involved in the process.

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