Finance
Funds run low at UK's Thames Water as rescue talks drag on
Published by Global Banking and Finance Review
Posted on December 3, 2025
3 min readLast updated: January 20, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on December 3, 2025
3 min readLast updated: January 20, 2026
Thames Water's rescue talks face delays as financial strain mounts, risking nationalisation. Debt levels rise, and negotiations with creditors continue.
By Sarah Young
LONDON, Dec 3 (Reuters) - Thames Water said it was taking longer than expected to secure a last-ditch rescue deal with creditors and the government that would allow Britain's biggest water company to avoid nationalisation as emergency funding runs out.
Half-year results showed it was once again facing a financial cliff edge. It has drawn down 1.43 billion pounds ($1.89 billion) of a 1.5 billion pound lifeline, and said it would need to access a second tranche early next year.
That access is subject to conditions, which it said on Wednesday it had not yet satisfied, and warned that meeting them or receiving a waiver was outside its control.
SYMBOL OF FAILURE OF BRITAIN'S WATER SECTOR
Thames Water, which has 16 million customers, has become a symbol of the failure of Britain's water sector, blamed for sewage pollution, while its nearly 20 billion pounds of debt have left it on the brink of financial collapse since 2023.
Thames Water's senior gearing has risen 1.5 percentage points since March to hit 85.9%.
"Debt levels at Thames Water are rising fast enough that there will be genuine worries about the levees breaking on its balance sheet before it can secure a rescue deal," said Dan Coatsworth, head of markets at AJ Bell.
That deal is led by a group of Thames Water's senior creditors, who are trying to agree terms with the government and regulators on their plan to write off 7.5 billion pounds of debt and invest 3.15 billion pounds of new equity.
If an agreement cannot be secured, Thames Water is likely to end up in the government's special administration regime, a form of temporary nationalisation.
CREDITORS SEEK LEEWAY ON HIGH LEVEL OF FINES
"Discussions are taking longer than expected but this is a complex situation and the current phase of the restructuring plan will likely take a number of months to conclude," CEO Chris Weston said.
Creditors have asked for leeway on the high level of environmental fines expected in future, but ministers are unlikely to let off a company blamed for decades for prioritising dividends over investment.
CFO Steve Buck called the talks "positive" but warned of "material uncertainty."
Thames Water said it was making progress in its turnaround, and sewage spills were down 20% in the six months to September 30 compared to the previous period. Half-year earnings (EBITDA) came in 70% higher at 1.2 billion pounds.
($1 = 0.7553 pounds)
(Reporting by Sarah Young, Editing by Paul Sandle and Bernadette Baum)
A financial crisis is a situation where the value of financial institutions or assets drops rapidly, leading to a loss of confidence and potential economic downturn.
Corporate governance involves the systems and processes that direct and control a company. It includes the practices that ensure accountability and transparency in a company's operations.
Investment is the allocation of resources, usually money, in order to generate income or profit. It can take various forms, including stocks, bonds, real estate, and other assets.
Financial management is the strategic planning, organizing, directing, and controlling of financial activities in an organization. It involves managing the company's finances to achieve its goals.
Explore more articles in the Finance category
