Thames Water’s lenders have put forward a new lifeline to stop the UK’s biggest water company from collapsing.
The consortium, called London & Valley Water—made up of big banks and investors—has offered a package that includes writing off around a third of Thames Water’s nearly £20bn debt, alongside an upfront cash injection of £5.4bn to stabilise the business.
Concerns over Thames Water’s survival first surfaced more than two years ago, with the government preparing for the possibility of stepping in and taking temporary control. But the lenders say their plan means no taxpayer money would be needed.
Serving about 25% of the UK’s population, including London and much of southern England, and employing 8,000 people, Thames Water has faced intense criticism in recent years. It has been repeatedly fined and shamed over sewage spills and leaky pipes. Just this May, it was hit with a record £122.7m fine for breaking rules on pollution and shareholder payouts.
Under the new proposal, investors promise:
- £5.4bn in fresh funding to keep the company afloat and improve performance.
- No shareholder dividends during the turnaround period.
- A lock-in until March 2030, meaning new owners can’t sell their stake until then.
- Payment of outstanding fines.
London & Valley Water said the plan offers the “fastest and most reliable” route to fix Thames Water, restore rivers and waterways, and rebuild trust with customers.
If approved, Mike McTighe—tipped to become the new chair—said billions would go into cutting pollution and improving services. “By the end of the decade, Thames Water can once again be a reliable, resilient and responsible company,” he said.
Ofwat, the water regulator, confirmed it will now assess the proposals.
Current CEO Chris Weston called the plan an “important milestone” in tackling Thames Water’s heavy debt burden and delivering the improvements customers expect. But earlier this summer, he admitted the company was under “extreme stress” and warned it could take at least 10 years to properly turn things around.
Meanwhile, customers have already felt the pinch. Average Thames Water bills have risen from £488 to £639 a year—part of a nationwide increase that has pushed household water bills up by around £10 a month. Photo by Jim Linwood, Wikimedia commons.