Thames Water secures financial future until October next year at least with 拢3bn cash injection
The utility, which supplies water to 16 million people, was due to run out of cash in May next year.
Friday 25 October 2024 10:21, UK
Thames Water has secured a 拢3bn injection to avoid running out of cash.
There were fears the UK's biggest water supplier, which serves 16 million customers, could have run out of money by Christmas.
But the cash injection secures its financial future for at least the next year, or possibly until the end of May 2026.
The deal reached with creditors, however, is subject to court approval as it involves a restructuring of debt. An interest rate of 9.75% will be payable on the sum.
The cash-strapped company has been struggling to secure fresh funds from existing shareholders after they withdrew a promised investment of £500m amid a funding row with industry regulator Ofwat.
Ofwat will make a final determination on how much Thames Water can put up bills and spend at the end of this year.
Keep up with all the latest news from the UK and around the world by following Sky News
At that point, the company could apply to the competition regulator the Competition and Markets Authority (CMA). The CMA deals with appeals against Ofwat's water company spending and bill-raising determinations.
Thames Water is seeking bill rises of 53% by 2030 meaning an annual bill would rise to £667 a year.
The company has been on the brink of effective nationalisation after it defaulted on some of its £15bn debt.
Read more from Sky News:
Chancellor to change government's fiscal rules
Spending plans not enough to stop investment fall
Boohoo in CEO row involving Mike Ashley
Be the first to get Breaking News
Install the Sky News app for free
At the same time, there were a record number of sewage outflows into UK waterways, according to the Environment Agency (EA).
Thames Water's chief executive Chris Weston described today's announcement as "good news for the business" and the "best option available for the company".