Thames Water seeks High Court approval for emergency cash amid £17bn of debt

3 February 2025, 15:13

Thames Water will seek High Court approval for an emergency £3bn rescue plan
Thames Water will seek High Court approval for an emergency £3bn rescue plan. Picture: Alamy

By Will Conroy

Thames Water will seek High Court approval for an emergency £3bn rescue plan on Monday in its latest bid to survive ongoing financial turmoil.

Listen to this article

Loading audio...

The UK's biggest water and waste company, which currently has about £17bn worth of debt, is seeking a judge's approval for a restructuring plan in a four-day hearing beginning at the Royal Courts of Justice on Monday.

The plan is centred around the emergency loan of £3bn, which the company says it needs to avoid running out of cash by the end of March.

Failure to secure approval will raise the chances of a temporary nationalisation, which could cost the government some £2bn a year.

Thames Water has been heavily criticised over its performance following a series of sewage discharges and leaks
Thames Water has been heavily criticised over its performance following a series of sewage discharges and leaks. Picture: Alamy

The company’s financial struggles emerged about 18 months ago and have been blamed on poor historical regulation, greedy shareholders, climate change and management failure.

Thames Water, which serves more than 15 million customers in London and the South East, is still considering whether to appeal against a decision by Ofwat over bill increases.

The water industry regulator decided to raise bills by 35% above inflation over the next five years – short of the 53% increase Thames Water applied for.

The £3bn loan offered by lenders would come in two instalments, with the first payment to get the company through to the autumn, and the second to be used if the company decides to appeal against Ofwat's bill rise.

The company has until 18 February to launch an appeal to the Competition and Markets Authority (CMA).

Campaigners gather outside the Royal Courts of Justice urging the court to block the application
Campaigners gather outside the Royal Courts of Justice urging the court to block the application. Picture: Alamy

Thames Water has been heavily criticised over its performance following a series of sewage discharges and leaks.

But regardless of what happens to the company in the future, water supplies to households will continue as normal.

The loan is being offered by existing "A class" creditors, who hold around £11bn of the debt racked up by the company.

Read more: Stabbing at school gate: 14-year-old teenager arrested as boy, 15, rushed to hospital and classrooms 'locked down’

Read more: 'More Scooby Doo than 007': Daniel Khalife sentenced to 14 years in jail after prison escape and spying for Iran

Water campaigners have criticised the terms of the loan, which is being offered at an interest rate of 9.75% over two and a half years with up to a further £100m payable in fees.

They have called on Environment Secretary Steve Reed to block it and force the company into special administration.

Mr Reed has previously said he opposes the nationalisation of Thames Water and wants a "market solution", but it has been reported the government has approached potential administrators to oversee an Special Administration Regime should the company fail.

Water campaigners have criticised the terms of the loan
Water campaigners have criticised the terms of the loan. Picture: Alamy

Barristers for Charlie Maynard, the Liberal Democrat MP for Witney in Oxfordshire, told the hearing on Monday: “The envisaged bridge finance aggravates rather than mitigates the Thames Water debt doom loop.

“It comes at (an) egregious cost; is likely to be exhausted mainly in payment towards Thames Water’s existing debt obligations, rather than being deployed in the business; and provides a bridge to nowhere.”

He continued: “The terms of the restructuring plan are a poor short-term fix and not financially sustainable in the mid or long term for Thames Water.”

More Latest News

See more More Latest News

Hollyoaks star and country singer thought to be son of British couple shot dead in French villa ‘by UK gangsters’

Hollyoaks star breaks silence over death of mum found dead in French villa with her husband

Harvey Willgoose's parents Caroline Willgoose (left) and Mark (right) holder a banner as they march to Bramall Lane in memory of their son

Hundreds gather for memorial march after 15-year-old Harvey Willgoose stabbed to death at school in Sheffield

Police tell locals to stay away from Jeremy Clarkson’s pub due to large gathering of pony and traps

Police tell locals to stay away from Jeremy Clarkson’s pub due to large gathering of pony and traps

Pauline Quirke

Birds of a Feather star Pauline Quirke 'struggling to identify family members' amid dementia battle

Detail of the logo on a Sony PlayStation 5 home video game console

PlayStation Network hit with worldwide outage as tens of thousands of gamers locked out

The Government has ordered Apple to allow it to access encrypted files uploaded to the cloud by any Apple user worldwide, it has been reported.

UK Government orders Apple to give it access to users’ encrypted data in 'unprecedented attack on privacy'

The wreckage of the small commuter plane that crashed in western Alaska has been found

Missing Alaska Bering Air plane found with all 10 people on board confirmed dead

Hollyoaks star and country singer thought to be son of British couple shot dead in French villa ‘by UK gangsters’

Hollyoaks star and country singer thought to be son of British couple shot dead in French villa ‘by UK gangsters’

Israeli hostages Or Levy, Eli Sharabi and Ohad Ben Ami have been released

'We won't gloss over the shocking scenes', warns Netanyahu as three freed by Hamas paraded on stage

Harry and Meghan at the 2023 Invictus Games

Meghan to join Prince Harry at Invictus Games in Canada

Exclusive
General Secretary of the Fire Brigades Union Steve Wright is yet to receive a follow up on the minister’s comments.

Government must introduce health checks for firefighters after Grenfell, union says

c

New EPC rules for landlords could lead to higher rents and fewer homes

PM holds 'crisis summit' after Bank of England warning over 'Stagflation'

'Either be disruptors or disrupted': Starmer tells ministers at start of 'crisis summit' after 'Stagflation' warning

Exclusive
Marcelle King

'My face was swelling up like Frankenstein's Monster': LBC uncovers scores of illegal botox products being sold online

President Trump Hosts Japan's Prime Minister Shigeru Ishiba At The White House

Donald Trump slams brakes on some China tariffs in third trade war U-turn

2020 Vanity Fair Oscar Party Hosted By Radhika Jones - Roaming Arrivals

Calls for Kanye West to be removed from X after 'antisemitic rampage' online