Thames Water has announced plans to begin raising additional funds from investors in the coming weeks. Despite ongoing discussions with potential backers since July, the company will formally initiate its "equity solicitation process" soon. This process is expected to continue past December, when the regulator, Ofwat, will release its final decision on water companies' proposals to increase consumer bills for 2025 to 2030.
Thames Water, which supplies water to around 16 million people, is currently facing a financial crisis and only has enough funding to operate until May 2025. The company also carries more than £15 billion in debt, prompting Ofwat to appoint an independent monitor to oversee its recovery efforts. Failure to secure additional investment could result in the company being nationalized next year, a scenario the Labour Government is eager to prevent.
The company is also at the center of controversy over proposed significant water bill increases, which have sparked public outrage, particularly as concerns grow over pollution caused by sewage spills into rivers. As of August 31, Thames Water held approximately £1.57 billion in cash, though £380 million of that is locked as reserves under existing financial agreements.
On Friday, the company requested permission from its creditors to access this £380 million; otherwise, it may face a financial "standstill" by the end of December. Even in that case, it has two additional potential funding options that could support its operations until May 2025. These include £420 million from undrawn Class A and Class B credit facilities and a further £550 million from undrawn reserve liquidity facilities.
Thames Water aims to secure enough new funding through its upcoming fundraising efforts to extend its financial runway beyond May 2025.
