Thames Water agrees £750m funding deal but warns ‘significantly’ more needed
Thames Water has said its shareholders have agreed to pump another £750 million in funding into the utility giant, but warned another £2.5 billion will be needed by 2030 as it struggles under a £14 billion debt mountain.
The supplier said the initial funding agreement to the end of March 2025 was a "major milestone", although it admitted "significantly" greater support would be needed for its turnaround to be delivered.
It said the further support from shareholders for the 2025-2030 period "will depend on the finalisation of the business plan and the regulatory framework that will apply".
Thames Water’s latest funding deal comes as the group battles to stave off nationalisation, with the Government working on contingency plans in recent weeks to take control if the firm collapsed.
Thames Water is the UK’s biggest water supplier with 15 million customers, serving households across London and the South East.
The funding agreement came as its annual results laid bare the financial woes at the group, with debts swelling to £14 billion from £12.9 billion the previous year and remaining in the red with underlying pre-tax losses of £82.6 million for the year to March 31.
Cathryn Ross and Alastair Cochran, interim co-chief executives of Thames Water said: "This announcement is a major milestone for Thames and all our stakeholders.
"The substantial equity support package announced today will underpin the delivery of a more focused turnaround plan that builds on the foundations that have been put in place over the last two years."
The funding secured adds to £500 million already injected in March this year by its investors.
Thames Water chairman Ian Marchant said the new deal is “the largest equity support package ever seen in the UK water sector”.
But the company’s shareholders – a consortium of pension funds and sovereign wealth funds – have said the cash is dependent on “the preparation of a business plan that underpins a more focused turnaround that delivers targeted performance improvements for customers, the environment and other stakeholders over the next three years and is supported by appropriate regulatory arrangements”.
Thames Water has come under pressure in recent years over its poor performance in tackling leaks and sewage contamination, while facing criticism for handing out big rewards to top bosses and shareholders.
Its former chief executive, Sarah Bentley, stepped down abruptly last month amid mounting worries over the financial stability of the company.
The group reiterated that it has £4.4 billion of cash and committed funding.
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