Thames Water seeks to delay billions in debt repayments in scramble to avoid nationalisation

The troubled utility giant is in last-ditch talks with lenders to extend its cash runway beyond next May

Thames Water is seeking to delay billions of pounds in debt repayments as it scrambles to avoid nationalisation.
The troubled utility giant is in last-ditch talks with lenders to extend its cash runway beyond next May by renegotiating loan agreements.
New analysis shows that Thames Water faces more than £2bn in debt repayments between this year and next, with some bonds amounting to as much as £500m. 
The scale of these repayments has prompted the company to turn to the High Court in a bid to seek potential changes to the repayment terms, with hearings scheduled to take place in November. 
A source close to the company said: “This is about trying to push back the loans as they fall due to extend our liquidity runway.”
Thames is seeking to delay repayments until after Ofwat’s decision on how much the utility can increase bills by over the next five years, which is expected in January.
Ofwat’s determination will prove crucial as to whether the company can raise fresh funds or not. Investors have warned that Thames will be uninvestable unless it is allowed to charge customers more and pay out more to shareholders.
A failure to raise fresh investment would make nationalisation almost inevitable as Thames’ struggles under the weight of a £16bn debt pile.  The Government has drawn up plans to take the company into the special administration regime (SAR) should it be necessary, a process that was used when energy provider Bulb collapsed in 2021.
Thames is Britain’s largest water company, serving 16m customers across London and the south east. 
Chief executive Chris Weston previously signalled that Thames Water had enough cash to survive the next eight months but the company would run out of money in May 2025. 
Between 2024 and the end of 2025, Thames Water is obliged to make repayments on 14 separate loans or bonds amounting to £2.6bn.
The threat of the company entering a special administration regime has led to crisis talks between Thames Water and its creditors, which include investment giants such as Apollo and Elliott.
Alongside the talks with creditors, Mr Weston and Thames chairman Sir Adrian Montague are trying to raise £3.3bn of fresh equity to keep Thames afloat. 
Bankers at Rothschild are helping stitch together a list of possible investors and have been working with Thames to sound out infrastructure giants in recent weeks.
Appetite for taking an equity stake in Thames largely hinges on the willingness of Ofwat to allow Thames to hike bills.  Many infrastructure investors will be put off from ploughing substantial sums into Thames unless they can earn a decent return through higher bills.
Last month Thames made a request to raise bills by as much as 59pc, meaning customers would pay £18.99 more a month, or £228 a year.
Sir Adrian said last month: “After decades of focusing on keeping bills low, now is the time for difficult choices.”
However, Ofwat already dismissed Thames’ previous request in July to raise bills by 40pc, saying it wanted to cap the increase at 23pc.
The situation is made bleaker by faltering relations between Ofwat and Thames after the regulator hit the utility with a string of fines for past misdemeanours, which is understood to have triggered anger at Thames.
Creditors have recently been attempting to broker a peace deal between the two sides after relations soured, further threatening the embattled utility’s future.
Ministers are hoping that Thames can come to an agreement with creditors, regulators and new shareholders to stave off a government bail-out
Prime Minister Sir Keir Starmer said in July that nationalisation would “not be consistent” with Labour’s fiscal rules while business secretary Jonathan Reynolds has also emphasised the need for a private sector solution. 
Mr Weston has also stressed his desire to keep Thames from being nationalised, saying such a step would not serve the taxpayer well. 
Ministers have quietly been drawing up contingency plans if Thames is unable to raise fresh funds or win the backing for a restructure from creditors.
Thames Water was owned for many years by Macquarie, an Australian infrastructure investor. It extracted billions in dividends during its 11-year ownership period while also loading up the company with debt. 
Macquarie has been heavily criticised for weakening rather than strengthening Thames during the period. 
Thames Water declined to comment.