Thames Water has received a loan of up to £3bn, securing the company’s immediate future until October next year. The UK’s largest water firm reportedly faced going out of business by Christmas if the loan was not approved. Thames Water has recently been under speculation that it could be taken over by the UK government due to its significant debts. However, despite larger debts than ever, the loan is expected to give rise to optimism that new and existing investors can agree on a deal that will secure the company’s long-term future.
More than a quarter of the UK’s population relies on Thames Water for its water supply, and customers of the company are currently facing significant price increases. In July, Thames Water approached regulator Ofwat about raising annual bills by 23% between 2025 and 2030. The company has since increased this demand by 53%. Thames Water’s finances have led to up to six parties demonstrating interest in acquiring a stake in the company; this could happen once capacity is established on how much of the company’s outstanding debt investors are willing to write off.
Thames Water’s potential future investors range from the UK’s largest independent business water retailer – Castle Water – to Canadian investment firm Brookfield Asset Management and Hong Kong’s CKI. The company has £16bn worth of debt, which is set to rise to £17.9bn by the end of next March. Thames Water CEO, Chris Weston, said that the loan has put the company in a much better position as they aim to find a long-term financial solution.
In response to the increased prices of the water industry, the UK government has created an Independent Water Commission to conduct a root-and-branch review of the industry as a whole. The commission, led by the Bank of England’s former Deputy Governor Sir Jon Cunliffe, aims to conduct a wide range of potential reforms, including the complete reform or removal of watchdog Ofwat. Despite calls for nationalisation from the Labour party, the government is looking at attracting private investments into the system and upgrading pipes, sewers, and reservoirs
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