Thames Water asks creditors for another £2.4bn — The Guardian

In the United Kingdom, water supplier Thames Water has asked its creditors to provide another £2.4bn in short-term funding. Without additional funds, the company could run out of liquidity at the end of 2026 or the beginning of 2027, The Guardian reports.

Thames Water said it does not expect to complete the recapitalisation process before it runs out of money. The company serves 16 million customers in London and the Thames Valley and has been on the brink of financial collapse for several years due to debts of around £20bn.

The previous package is nearly exhausted

In February last year, creditors provided Thames Water with £3bn in financial support so that it could continue operating during negotiations on debt reduction and raising new capital. The company has now used £2.65bn of this package.

Creditors grouped in London & Valley Water assumed de facto control of the company after its shareholders withdrew from participation. The creditor group includes US hedge funds Elliott Management and Silver Point Capital, as well as institutional investors BlackRock and M&G.

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Terms of the rescue plan

Creditors have prepared a rescue plan that provides for writing off £4bn in loans. However, its implementation depends on whether regulator Ofwat agrees to exempt Thames Water from environmental pollution fines for several years.

The company said the additional £2.4bn should ensure liquidity until autumn 2027 and allow it to continue its programme of capital works and improvements for consumers and the environment. Creditors are expected to vote on the proposed plan later this month.

Some Labour Party politicians and environmental activists have called for Thames Water to be placed under special state administration while a new buyer is sought. Andy Burnham has said that Thames Water should be brought into public ownership.