Thames Water has funds to survive until end of year but warns of uncertainty over future
Annual results show struggling firm’s net debt has risen to £18.5bn, up from £16.8bn a year earlierBusiness live – latest updatesThames Water has said it has sufficient funding to
By The Guardian
Thames Water has confirmed it has sufficient funding to operate until the end of 2026 but warned of “material uncertainty” regarding its long-term future as it pursues a recapitalisation plan to avoid nationalisation. The UK’s largest water company, which serves 16 million customers across London and the south of England, released annual results showing its net debt has risen to £18.5bn, an increase from £16.8bn the previous year.
The firm stated it is continuing to work with creditors, regulators and the government to finalise a rescue package that creditors are preparing to back with fresh funding over the next 12 months. Senior lenders, who hold a majority of the company’s roughly £20bn debt, plan to issue a “comfort letter” to the auditor ahead of the July 15 accounts deadline to provide a going-concern opinion.
The proposed rescue plan includes injecting £3.35bn of equity and £3.5bn of debt into the supplier, alongside a commitment not to pay dividends until the 2030s. In June, the government raised objections to an earlier rescue proposal, moving the utility closer to a form of nationalisation while it carries a debt burden of nearly £20bn.
Thames Water previously faced a £122.7m penalty in May 2025, the largest ever imposed by regulator Ofwat, for violations concerning sewage discharges and shareholder distributions. Ministers are now formulating strategies to establish legally enforceable debt targets for water companies in England to prevent another corporate collapse similar to Thames Water.