Thames Water has warned that crisis talks with lenders to secure its future are taking “longer than expected” and will continue into 2026, raising the prospect of a collapse into government control. Britain’s biggest water utility reported a swing to profit of £414m for the six months to September, compared with a loss of £149m in the same period last year, helped by a 31% rise in customer bills.
Despite the profit jump, the company said there is “material uncertainty” over its status as a going concern. A collapse under a special administration regime (SAR)—a form of temporary nationalisation—could occur “in the very near term” if it fails to agree terms with its controlling lenders. The utility, which serves 16 million customers in south-east England, has been struggling under £17.6bn of net debt built up since privatisation.
Creditors have asked regulator Ofwat and the government to waive future pollution fines, arguing that the prospect of hundreds of millions in extra costs makes a turnaround impossible. The standoff has already lasted months longer than expected, with talks originally due to conclude by the end of the year. The company now says the current phase of the restructuring plan will likely take “a number of months” to finish.
Revenues rose 40% to nearly £2bn after the bill increase, which also triggered a 75% jump in complaints to over 55,000. However, complaints about water and wastewater services fell 11%. Investment rose 22% to £1.26bn, funded by the higher bills, and sewage spills dropped 20% to 292.
Thames Water came close to being taken into temporary government control earlier this year after securing court approval for a £3bn emergency funding plan. It is now working on a second debt restructuring deal to transfer ownership to lenders, led by hedge funds including Elliott Investment Management and Silver Point Capital. Bondholders have requested 15 years of leniency from environmental fines, but the government has so far resisted, while also seeking to avoid an SAR.
The company paid £57m in advisory fees during the period. Chief executive Chris Weston said operational progress is being made alongside the recapitalisation, and that the company is working to secure a market-led solution in the best interests of customers and the environment.
