Thames Water has initiated a £3bn fundraising endeavour to alleviate some of the beleaguered utility's substantial debt.
The water firm currently holds just £500m in cash, and is optimistic that the additional funds will prolong its operational capacity for at least another year, as reported by .
In a statement today, Thames Water expressed that the funds will enable the company "to continue with the planned investment and maintenance of our infrastructure in order to continue to meet customers' needs, and our environmental responsibilities".
During the summer, regulator Ofwat compelled Thames Water to appoint an independent monitor and devise a 'suitable' recovery strategy following Moody's decision to downgrade its credit rating to junk.
Ofwat also imposed a £104m penalty on the water firm due to the companies' inadequate management of wastewater treatment works and broader sewer networks.
Today, Thames Water revealed that an initial segment of £1.5bn has been fully guaranteed by creditors, with other debt providers given the chance to participate until 11 November.
Rumours about the backstop have been circulating over the past few months, with large US private equity funds being solicited for funding.
The water company further stated that there was potential for an additional £1.5bn, as it appeals to the Competition and Markets Authority.
This would extend Thames Water's liquidity to October 2025, with the possibility to extend even further to May 2026 if it makes the appeal to the CMA.
Thames Water chair Adrian Montague stated, "The board and leadership team remain focused on stabilising the business and today's announcement is an important step in the process to increase its long-term financial resilience,".
He continued, "There will be further stages and we will continue to work collaboratively with our many stakeholders as we look to attract new equity into the business and seek a final determination that enables the delivery of our ambitious business plan for the next five years."
Adding to this, Thames Water CEO Chris Weston said, "Today's news demonstrates further progress to put Thames Water onto a more stable financial footing as we seek a long-term solution to our financial resilience,".
He also noted, "This step forward comes on top of our performance improvements which were recently recognised by Ofwat."
Weston concluded, "We are working closely with and have the support of our creditors, enabling Thames to continue to implement our turnaround plan so that we can deliver better results for our customers and the environment whilst seeking to attract new capital into the business. In the meantime, our teams on the ground continue to supply our services to our 16 million customers every day."
