Monday 16 March 2026 10:56 am  |  Updated:  Monday 16 March 2026 10:58 am

Will Thames Water’s latest rescue package pass muster?

By: Simon Hunt

City Editor

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Thames Water’s latest rescue package has been designed to fend off the public’s criticism of the way the company has been mismanaged.

In a statement, Thames Water said the new detail would comprise £6.6bn of new debt – including £3.3bn accessible on day one of the rescue plan being implemented – which will be provided by a group of funds including Elliott Management and Invesco.

The utility business said the deal will also include £3.4bn of new equity to support its turnaround. 

The proposal is non-binding and remains subject to approval by water watchdog Ofwat and other regulators.

The fresh £10bn plans, by a consortium which calls itself London & Valley Water (L&VW), says it will pay all outstanding fines, in a bid to appease regulators.

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L&VW also says there won’t be any “recovery from customers” and that “certain benefits” of its turnaround plans, if successful, will be “shares with customers,” in a bid to placate Londonders’ worries that they’ll be picking up the tab.

And to fend off fears they’ll be yet more cash extraction to the benefit of investors, L&VW have vowed not to pay out any dividends for the next ten years.

There’s also a £25m “environmental and wildlife support” fund, in what looks like a half-hearted olive branch to singer-turned-sewage-campaigner, Feargal Sharkey.

Now it’s over to regulators to decide whether this deal will get over the line, or whether the company would fall into administration and end up being nationalised.

As much as the government is eager to blame Thames Water’s owners for the precarious financial state it finds itself in, there is no huge thirst to take control of it.

That would mean the government picking up the tab for billions in debts – something it can ill afford, and could also set a precedent for cleaning up when other water firms fail. 

So if this new deal can mean the government, the regulator and Thames Water save face – it may be the best way out of this mess for all concerned.

Read more

Thames Water creditors offer ‘best and final’ rescue funding deal

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