STORY
Thames Water could run out of money before the end of 2026 unless it secures further financial support, placing renewed pressure on the Government to decide whether the troubled utility should enter special administration. The company supplies water and wastewater services to about 16 million customers across London and the Thames Valley.
The company said it had £588 million of liquidity available at the end of June, consisting of £515 million in cash and £73 million from an undrawn loan facility. It said that, with the continuing support of creditors, it had sufficient funding only until the final quarter of 2026.
Reports suggest the company could become insolvent as early as November if a longer-term rescue agreement is not reached. Thames Water has accumulated debts of about £20 billion following years of borrowing, underinvestment and criticism of its environmental and operational performance.
A consortium of creditors has proposed a rescue package involving £3.35 billion of new equity and billions of pounds of further borrowing. The plan would also write off a substantial portion of the company’s debt and introduce a programme intended to improve performance and infrastructure.
The proposal has proved politically controversial because creditors have sought concessions over regulatory penalties and other liabilities. Ministers have expressed concern that any agreement must protect customers and the environment rather than provide an overly generous settlement for investors.
Prime Minister Andy Burnham is reported to be considering placing Thames Water into the Special Administration Regime, which would allow essential services to continue while the company was restructured or transferred to new ownership. The process would represent the first use of the special water administration arrangements for a major British utility.