Thames Water seeks urgent funding amid cash crisis by May 2024

Thames Water, the largest water company in Britain, is facing a severe funding crisis, with only enough cash to operate until May 2025. The company has over £15 billion in debt and has been in discussions with potential investors since July. It plans to formally initiate an equity solicitation process in the coming weeks, which is expected to extend beyond December, coinciding with the regulator Ofwat's decision on proposed consumer bill increases for 2025-2030. As of August 31, Thames Water had approximately £1.57 billion in cash, but £380 million of that is tied up as reserves under existing funding agreements. The company has requested its creditors to release these reserves to avoid a standstill by the end of December. If it fails to secure additional funding, Thames Water risks nationalization, a scenario the Labour Government aims to prevent. The company is also embroiled in controversy over proposed significant hikes in water bills, which have drawn public outrage amid ongoing issues with sewage pollution in waterways. To navigate this crisis, Thames Water has two potential funding sources: £420 million in undrawn committed facilities and £550 million in undrawn reserve liquidity facilities, which could help sustain operations until the end of May 2025. The upcoming fundraising efforts are crucial for the company to extend its financial viability beyond this point.