Thames Water £2.4bn: creditors asked for extra cash as funds near end
Thames Water has asked creditors for a further £2.4bn because it is close to running out of cash, warning it would be without funds by the end of 2026 or the start of 2027 unless the money arrives.
Thames Water £2.4bn: creditors asked for extra cash as funds near end
Thames Water has asked its creditors for a further £2.4bn as the UK's largest water company comes close to running out of cash. Without the money, it said it would run out of funds by "the end of 2026 or the start of 2027".
Why the extra money is needed
The company said on Thursday it needs another short-term cash injection because it would be unable to reach a longer-term deal to sort out its debt pile in time. In a stock market statement, it said it "does not expect to complete its recapitalisation process ahead of this date".
"continues to work closely with stakeholders to secure a market-led solution"
That statement, from Thames Water, accompanied the request for extra funding.
The company and its debt
Thames Water serves 16 million customers in London and the Thames valley. It has been on the brink of collapse for several years, overwhelmed by a debt pile now about £20bn.
- Shareholders walked away, leaving the company under the effective control of its creditors while they negotiate a deal to avoid bankruptcy.
- Creditors gave Thames a £3bn lifeline in February last year to see it through debt negotiations.
- It has now drawn down £2.65bn of the £3bn, leaving it perilously close to running out of cash.
- The creditors are collectively called the London & Valley Water company, led by American hedge funds such as Elliott Management and Silver Point Capital, plus institutional investors BlackRock and M&G.
The rescue plan and its obstacles
Creditors have proposed a rescue plan that would involve them writing off £9.6bn in loans. The plan hinges on Ofwat agreeing to let the company pay set penalties for several years upfront and creating a special regime, a prospect the Labour government has found politically unpalatable.
Some Labour politicians and environmental campaigners have called on Keir Starmer and then Andy Burnham to put Thames Water into special administration, a temporary form of government control while a buyer is sought. Burnham has pledged more public control of the water industry and said public ownership for Thames Water "is what should be done".
Starmer's government had committed to implementing recommendations on changes to the water system from the former Bank of England deputy governor Sir John Cunliffe; Burnham's government has not yet said what it plans to do.
What happens next
Thames Water said the extra money would extend liquidity into autumn 2027 and allow it to continue to deliver its capital programme, along with customer and environmental improvements. Creditors are expected to vote on the proposals later in the month.
