Thames Water has successfully secured a £3 billion cash injection, ensuring its financial stability at least until next October. The utility, which provides water to 16 million customers, faced the possibility of running out of cash by May 2025.
This funding agreement with creditors aims to prevent a cash crisis during the holiday season. However, the deal requires court approval and includes a 9.75% interest rate on the amount.
The situation for Thames Water became critical as existing shareholders withdrew a promised £500 million investment amid disagreements with the industry regulator, Ofwat. The utility’s financial struggles have brought it close to nationalisation after defaulting on parts of its £15 billion debt.
Additionally, new government legislation could impose severe penalties on water company executives for obstructing investigations or violating pollution regulations. Ofwat is expected to finalize its determination on Thames Water’s billing and spending strategies by the end of this year.
The company plans to request a 53% increase in bills by 2030, potentially raising annual costs to £667. Recently, Thames Water has also faced scrutiny over a record number of sewage discharges into UK waterways. The company’s CEO, Chris Weston, called the funding news “encouraging” and emphasized it as the best option for moving forward.
