Thames Water debt pile balloons to £18.5bn as it fights to fend off nationalisation
Thames Water’s debt pile has swelled to £18.5billion as the water firm fights to fend off nationalisation.
The embattled water firm, which serves around 16 million customers, said it had just £515million in cash as of the end of June to see it through to the end of the year.
After a period of immense uncertainty for Thames Water, there are fears that the incoming Prime Minister could bring the firm into public ownership. Andy Burnham has previously said there should be greater public control of utilities.
The Government was already looking at taking Thames Water into its Special Administration Regime – effectively a form of temporary public ownership.
The utility said it continued to work with creditors, regulators and the Government on a recapitalisation plan, as it seeks to avoid nationalisation.
On the brink: Thames Water said it had enough funding to last until the end of the year
Today, Thames Water revealed statutory net debt had climbed to £18.5billion by 31 March, from £16.8billion a year earlier, as it continues to ‘fund the business through a combination of debt and internally generated cash flows’.
In its annual report, Thames Water said ‘it is reasonable to assume’ that the company will have ‘adequate resources’ to continue operations for the next 12 months.
But it flagged that there was ‘material uncertainty’ as to whether it will secure further liquidity to deliver recapitalisation.
Thames Water has effectively been on the brink of collapse since 2024 after its debts ballooned, with the Government closely scrutinising rescue plans.
Creditors are currently battling to secure a £10billion deal to save the water and sewage company after Environment Secretary Emma Reynolds questioned whether it did enough to protect customers and the environment.
Despite its woes, Thames Water said it had returned to a full-year profit after raising customer bills by 40 per cent last April. It reported a pre-tax profit of £226.4million for the year to 31 March, after losses of £1.65billion in the previous year.
Chief executive Chris Weston hailed progress in the company’s turnaround efforts, even as results showed it had only met 55 per cent of its regulated targets, whilst customer billing complaints had surged by 101 per cent.
‘Thames Water today is a very different business from what it was two years ago,’ said Weston.
‘While we have a lot more to achieve, the progress we have made in turning the company around has meant we are now performing better and are in a strong position to accelerate the delivery of the biggest upgrade of our infrastructure in 150 years.’
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