Thames Water May Run Out Of Money By June 2025, Company Says
Thames Water, the UK's largest water supplier, is in a precarious financial position and facing mounting debt of £15.2 billion. The company has admitted it has enough funds to operate only until May 2025 and is urgently seeking new equity to secure its future. CEO Chris Weston, who has been in his role for seven months, said the next few months are crucial for raising the necessary funds.
Thames Water's current owners, including major international investment funds, have previously deemed the company "uninvestable" and withdrew a planned £500 million cash injection. The company is now trying to attract new investors and lenders, with formal talks expected to start in the autumn.
If Thames Water cannot secure the needed funding, it could be taken over by the government under a special administration regime, a contingency plan similar to the one used when energy company Bulb went bust in 2021.
Despite its financial woes, Thames Water reported an increase in annual profits to £157.3 million. Weston remains cautiously optimistic about finding a market-led solution. "Not going to speculate on what may or may not happen...there's a lot more water to go under the bridge," he said.
Thames Water asks Ofwat for permission to increase bills by up to 44%
The company is asking regulator Ofwat for permission to increase customer bills by up to 44% between 2025 and 2030 to support £21 billion in infrastructure investments, arguing that this is necessary to upgrade its outdated systems and cope with a growing population and climate change. A draft ruling from Ofwat on water companies' charges is expected soon, with a final decision in December.
Weston emphasised that Thames Water needs a "supportive determination" from Ofwat but expects challenging negotiations. He also highlighted the need for the regulator to balance investor returns with the cost of improving infrastructure. "We need to learn to live within our means," he said.
The company has also faced fierce scrutiny from the new Labour government. Junior Minister Jim McMahon stated that the water industry needs tougher regulation and more investment. "Thames really do need to look at their own house and get it in order," he said.
The upcoming decisions by Ofwat will be pivotal in determining the company's future and whether it can continue to serve its 16 million customers in London and the Thames Valley.
