Thames Water has warned that crisis talks with lenders are taking “longer than expected” and will extend into 2026, raising the prospect of a collapse into government control. Britain’s largest water utility, serving 16 million customers in south-east England, reported a profit of £414 million for the six months to September, compared with a loss of £149 million in the same period last year, after raising customer bills by 31% in April.
Despite the profit jump, the company said there is “material uncertainty which may cast significant doubt” on its ability to continue as a going concern. 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 creditors, led by hedge funds including Elliott Investment Management and Silver Point Capital, have asked regulator Ofwat and the government to waive future pollution fines, arguing that extra costs hinder a turnaround.
The standoff has dragged on for months, with talks originally expected to conclude by the end of 2024. Thames Water stated: “Discussions are taking longer than expected but this is a complex situation and the current phase of the restructuring plan will likely take a number of months to conclude.” Revenues rose 40% to nearly £2 billion, driven by the bill increase, while investment rose 22% to £1.26 billion. The company’s net debt stands at £17.6 billion, built up since privatisation.
Thames Water has faced public and political outrage over sewage leaks, though spills dropped 20% to 292 during the period. Complaints surged 75% to over 55,000 due to higher bills, though complaints about water and wastewater services fell 11%. The company paid £57 million in advisory fees for the restructuring process. The government has so far resisted granting regulatory leniency, but ministers are also keen to avoid taking control under an SAR.
Chief executive Chris Weston said: “The first half of this year has been shaped by good progress across all areas of our operational transformation. We continue to work closely with stakeholders to secure a market-led solution that we believe is in the best interests of our customers and the environment.”
