Thames Water Creditors Submit New Rescue Plan
Thames Water’s major creditors have submitted a new rescue deal aimed at stabilising the crisis-hit utility company without relying on taxpayer funds or government takeover. Under the new plan submitted by London & Valley Water, creditors are offering to write off around £4bn of the company's near-£20bn debt, to provide a cash injection of £5.4bn to support upgrades and operational improvements, £3.15bn in new equity and £2.25bn in debt to help shore up finances. Creditors have also committed to paying all outstanding environmental fines.
Serving 16 million people in London and southern England, Thames Water has faced growing financial trouble, especially after a £4bn deal with KKR collapsed earlier this summer. The company has been widely criticised for repeated sewage spills, leaking infrastructure, and weak customer service, and was recently fined a record £122.7m for breaching rules on pollution and shareholder payouts.
Regulator Ofwat is reviewing the new plan. Thames Water CEO Chris Weston called the proposal an “important milestone” in efforts to secure the company’s future, while Mike McTighe, proposed future chair, promised to “inject billions,” reduce pollution, and rebuild trust. Creditors say no dividends will be paid to shareholders during the turnaround period and the company won’t be sold before March 2030. A future public listing is also planned.
If the deal fails, the government could step in through a special administration regime — a move both officials and creditors want to avoid. London & Valley hopes to finalise the agreement with Ofwat this autumn.
