Thames Water MBL.AX is among a list of 11 debt-laden utilities at financial risk from the credit crisis, an investment bank has warned.

The country's biggest water company, which has around 13 million customers in the greater London area, has debts of 6.8 billion pounds and a regulatory asset value (RAV) of just 6.5 million pounds, according to specialist bank Reynolds Partners.

"Utility companies have built up massive debts, leaving little scope for further borrowing if they are hit by a financial shock resulting from, for example, paying for repairs caused by natural weather disasters," Reynolds Chief Executive John Reynolds told Reuters.

Thames led a list that included 10 other utilities -- including Southern Water and Kelda's Yorkshire Water KEL.L. Together the 11 companies have borrowings of 28 billion pounds, against an RAV of 29.3 billion, the bank said.

However, Thames Water questioned the validity of the report, saying the debt figure used by Reynolds was for the group's holding company Kemble, owned by a consortium led by Australian bank Macquarie.

"Debt in Thames Water Utilities Ltd is currently 4.8 billion pounds, with our RAV at approximately 7 billion. Thames Water is in a strong financial position," a spokesperson said.

"We currently have cash reserves and committed bank facilities totalling over 1.2 billion pounds. Our insurance cover also protects the company ... This securitisation facility ensures our customers, lenders and the business are firmly protected," she added.

Reynolds said the vulnerability of some utilities could eventually affect customer bills, but gas and electricity regulator Ofgem said it would ensure customers would be protected by any company crisis.

"The regulated side of the network could not increase charges to customers as the price charge is set by regulators Ofgem and (water regulator) Ofwat," a spokesman said.


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