Thames Water secures £750m from investors

The business did, however, acknowledge it will require additional funding over the coming years – with it expected to cost around £2.5bn between 2025 and 2030, to further improve operational performance and financial resilience.  

The water firm is struggling under a mountain of debt, with the government saying it’s ready to act in a worst-case scenario if the company collapses. 

Cathryn Ross and Alastair Cochran, interim co-chief executives of Thames Water, said: “This announcement is a major milestone for Thames and all our stakeholders.   

“Since June 2022, we have engaged constructively with shareholders, working towards a common goal of developing a long term, comprehensive, financeable and enduring business plan for the company to improve operational performance and financial resilience for the benefit of our customers and the environment.  

“The substantial equity support package announced today will underpin the delivery of a more focused turnaround plan that builds on the foundations that have been put in place over the last two years and focuses expenditure on a smaller number of initiatives, which will deliver material and sustainable improvements in key performance metrics over the next three years.” 

Reflecting on the news, Hargreaves Lansdown’s head of money and markets Susannah Streeter said the financing is “very much an emergency pumping operation”, rather than shoring up Thames Water’s finances in the longer term.  

She added: The sum agreed to be paid is less than the £1bn Thames Water said it initially needed, so there is a shortfall in financial lifeline. In addition, the investors will be staring at the huge bill for the infrastructure work needed to mend the leaks and sewage discharges which the company keeps being fined for. 

“Thames Water is a casualty of the rapid escalation of interest rates but is also suffering because it was stripped of a cash float which should have protected it when monetary tides turned. Its profits were siphoned off in the good times, rather than being used to build up a bulwark for when borrowing costs surged back upwards.”