(Bloomberg) -- Thames Water Utilities Ltd.’s board members are set for last-ditch talks to update their business plan this week after shareholders branded the previous one “uninvestible.”

Directors of the heavily indebted utility are set to meet Thursday, with the plan expected to be released Friday, according to a person familiar with the plans who asked not to be identified discussing private matters. A spokeswoman for Thames Water declined to comment.

Thames supplies a quarter of the water and sewage services to England, including London. It’s rushing to find at least £2.5 billion ($3.1 billion) in equity after parent company Kemble Water Holdings Ltd. last month refused to inject any more money into the business. 

Thames needs the cash to fund its turnaround, fix chronic leaks and sewage spills, and develop new supplies in the face of worsening drought tied to climate change. But investors said an overly restrictive set of regulations from industry watchdog Ofwat made it impossible for them to provide the money.

Kemble, which gets all of its income from Thames Water dividends, defaulted on its own debt a week after declining further payouts.

When Thames Water unveiled its new five-year business plan in October, the utility said it wanted to raise bills by 40% to fund an investment program totaling £18.7 billion. Those figures may be revised upward as the company works to meet new environmental-protection rules set by the government.

The plan is being scrutinized by Ofwat. A draft determination will be announced June 12.

Other water companies have increased their expected capital expenditures and the amounts they charge customers following discussions with Ofwat and the government.

In March, Southern Water Services Ltd., another poor performer, raised its expected expenditure by 8.5% and said it now sees average annual customer bills at £727 by 2030, compared with an October projection of £681. Its customers are set to see the biggest price increases across the UK. 

Severn Trent Plc also raised its expenditure plans and said annual costs would average £547.10 by 2030, 75 pence higher than its October forecast.

However, Yorkshire Water Services Ltd. and United Utilities Group Plc said they don’t plan to raise customers’ bills, signaling that Thames Water’s next moves aren’t so straightforward.

The government prepared to take Thames Water into special administration by updating the insolvency rules for water companies, but ministers have pressed the company to sort out its own financial mess.

“It is absolutely necessary that the government rely on and defer to that regulator to oversee the financial position of individual companies,” Treasury Minister Gareth Davies told Bloomberg Radio on Tuesday.

(Updates throughout with details, Treasury minister comments)

©2024 Bloomberg L.P.