Thames Water has secured creditor backing to defer more than £12 billion of debt repayments until March 2028, giving the struggling supplier extra time to negotiate a rescue deal. The company said creditors representing over £12 billion of secured debt have signed up to the agreement, with Thames Water seeking further lender support. The move extends repayments that were originally due in March 2027 by another year.
Thames Water is burdened by total debts exceeding £20 billion and has been battling for survival. The latest agreement follows a previous announcement that its controlling lenders approved £2.4 billion in additional funding to prevent the company running out of cash by the end of the year. This new injection comes on top of an existing £3 billion emergency loan, providing enough resources to keep the company operating until autumn 2027. Together, these measures have extended the timeframe available for Thames Water to complete a recapitalisation deal.
Thames Water said the debt restructuring "will afford the company additional time to agree the terms of a future recapitalisation of the Thames Water group and will support the continued delivery of the company's record AMP8 capital investment programme focused on improvements for customers and the environment". The company remains focused on "securing a market-led solution which delivers long-term financial resilience and improvements for customers and the environment as soon as practicable".
A consortium of over 100 creditors collectively owning about £17 billion of Thames Water's debt is pursuing a £10 billion rescue package under the banner London & Valley Water. This consortium is negotiating with regulator Ofwat and the Government, representing what is viewed as the final realistic option to avoid Thames Water entering special administration after a previous rescue attempt with US private equity firm KKR collapsed in May last year. The consortium is expected to put forward new proposals to Ofwat before the year ends, following criticism from former environment secretary Emma Reynolds in June that their original plan did not go far enough to protect customers or the environment.
The Environment, Food and Rural Affairs Committee called in September for the London & Valley Water takeover plans to be abandoned, stating they do not have "the interests of the public, the company or the environment at heart". Thames Water said that "the company's board, Ofwat, other regulators and relevant investment committees have made no decision to accept and take forward any proposal from L&VW to implementation".