Headlines
UK's Thames Water battles to avoid nationalisation
Published by Global Banking and Finance Review
Posted on October 2, 2025
3 min readLast updated: January 21, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on October 2, 2025
3 min readLast updated: January 21, 2026
Thames Water faces financial instability and potential nationalisation. Creditor-led rescue efforts and regulatory challenges shape its future.
LONDON (Reuters) -Britain's biggest water supplier, Thames Water, has become a symbol of failure in the country's water sector - blamed for sewage pollution, while its precarious finances have left it teetering on the brink of nationalisation since 2023.
A group of creditors is leading a last-ditch rescue effort to invest new equity and turn around its performance. If that fails to get the green light the company will enter the government's special administration regime.
Below is a timeline of how the crisis unfolded.
June 2023
Thames Water's management asks shareholders, including Ontario Municipal Employees Retirement System, the UK's Universities Superannuation Scheme and China Investment Corp, for 1 billion pounds of fresh equity.
The government and water regulator Ofwat start drawing up contingency plans to keep the company operating should it collapse financially.
July 2023
Thames Water investors agree to inject 750 million pounds of new equity to fund a turnaround. The company warns it will need an additional 2.5 billion pounds ($3.37 billion) of equity over 2025-2030.
March 2024
Thames Water shareholders refuse to provide some of the new equity they had promised to invest. They blame regulatory conditions for making the 2025-2030 business plan "uninvestible".
The company says it will pursue options to secure new funding from new or existing shareholders.
September 2024
Thames Water says it will run out of money within months unless major creditors approve emergency funding. S&P and Moody's slash its credit rating, warning Thames Water is on the brink of default.
October 2024
Thames Water lines up a debt lifeline of up to 3 billion pounds from some of its creditors, which if approved and under certain conditions, will tide it over until May 2026.
December 2024
Regulator Ofwat says Thames Water can increase bills by 35% over the 2025-2030 regulatory period, lower than the 53% rise the company had sought.
February 2025
The company secures court approval for the 3 billion pound debt lifeline.
March 2025
Thames Water says it wants to raise new equity by the end of June as part of a recapitalisation to secure its long-term future. It says it is assessing proposals from six interested parties.
Later that month it names U.S. investment firm KKR as the frontrunner in the equity process.
May 2025
Ofwat fines Thames Water a record 123 million pounds for breaching legal obligations over sewage treatment and dividend payments.
June 2025
KKR pulls out of a deal to invest in Thames Water.
The company says it is now focused on a recapitalisation plan led by a group of senior creditors, who plan to invest 3 billion pounds of new equity and write-off some of the group's debts.
July 2025
The government announces plans to overhaul water regulation, which could include giving companies breathing space on fines to help them avoid financial collapse, but it is not clear whether those changes will be made in time to help Thames Water.
August 2025
Hong Kong's CK Infrastructure Holdings wants to acquire Thames Water if it collapses and is placed into the government's special administration regime, media reports say.
October 2025
The senior creditors group trying to acquire Thames Water through a recapitalisation plan presents its latest turnaround plan to the regulator, hoping to win its support.
($1 = 0.7408 pounds)
(Reporting by Sarah Young in London, additional reporting by DhanushVignesh Babu and Tuhina in Bengaluru;Editing by Elaine Hardcastle)
A financial crisis is a situation where the value of financial institutions or assets drops significantly, leading to widespread economic instability. It can result from various factors, including poor management or external shocks.
Debt instruments are financial assets that represent a loan made by an investor to a borrower. They include bonds, notes, and debentures, and typically involve regular interest payments.
The UK economy refers to the economic system of the United Kingdom, characterized by a mixed economy with a combination of private and public enterprise, and is one of the largest economies in the world.
A credit rating is an assessment of the creditworthiness of a borrower, indicating the likelihood of default on debt obligations. It is expressed as a letter grade and affects borrowing costs.
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