Struggling Thames Water raises £750m in battle against nationalisation

Thames Water said its shareholders have agreed to provide a further £750 million in funding through to the end of March 2025, but warned that around another £2.5 billion will be needed in following years for its turnaround to be delivered. 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”. 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.” Last month it was reported that the debt-laden water firm, the country’s largest supplier with some 15 million customers, could be nationalised. Government ministers were said to be drawing up contingency plans in the event that Thames, which supplies London and the Thames Valley, collapsed. Ministers and regulator Ofwat had started talks about putting Thames Water into special administration. The company has debts of around £14bn. The news came after chief executive Sarah Bentley announced she was stepping down with immediate effect after three years in the job. She was forced to give up her bonus after the company’s environmental and customer performance suffered. Thames Water had been found to have discharged raw sewage into rivers where it operates. It has also come under intense scrutiny in recent years because of its bad record on leaks, sewage contamination, executive pay and shareholder dividends. Despite giving up her bonus Ms Bentley, netted £1.6m in pay and compensation. Energy supplier Bulb, which had around 1.5 million customers, collapsed in 2021 and was placed into a similar insolvency process. Thames Water’s bigger size has sparked fears that the insolvency process could cost billions of pounds. Water industry ownership restrictions that prevent consolidation mean the money spent on the bailout of Bulb could be dwarfed if Thames Water was to fail. More to follow on this breaking news story…