Creditors vote Thursday on emergency loan for Thames Water

A group of creditors is set to vote on Thursday about an emergency loan for Thames Water. The lenders, known as London & Valley Water, are deciding whether to increase their funding limit to 5.4 billion pounds. This increase would provide an additional 2.4 billion pounds to the company. The money is intended to keep the utility operating until autumn 2027.

Thames Water stated this month that it needs the new cash injection. The company said it could not reach a longer-term deal to handle its debt before running out of money. Officials expect the cash to run out by the end of 2026 or the start of 2027. The utility currently serves 16 million customers in London and the Thames Valley.

The company carries a debt pile of about 20 billion pounds. In 2024, shareholders left the company, leaving creditors in control. The creditors have already approved 15 previous consent requests from Thames Water. Under the current facility, the company has drawn 2.65 billion pounds of the 3 billion pounds available. This original loan carries a 9.75 percent interest rate.

Sophie Conquest, the lead campaigner at We Own It, raised concerns about the cost to residents. Analysis by her group showed that the new loan would cost 40 pounds per household in interest alone. If the entire loan amount were added to bills, the cost would reach 454 pounds per household. Conquest said, "Since privatisation, £11.9bn has been extracted from Thames Water. They have already had more than enough of our money."

She argued that if the company cannot survive without another expensive bailout, the government should let it go bust. She called for special administration followed by permanent public ownership. Conquest added, "During a cost of living crisis, this government cannot continue to reward Thames Water’s failures at our expense."

Business and Trade Secretary Andy Burnham is currently deciding whether to allow a takeover deal by the creditors. This deal would involve writing off fines and reducing environmental commitments. He is also considering whether to nationalize the company or take another form of state control. Some Labour politicians and environmental campaigners have urged him to place the company into special administration instead.

Charlie Maynard, the Liberal Democrat MP for Witney, criticized the proposed loan. He said, "The creditors will likely hand Thames Water yet another massively overpriced rescue loan, which customers will end up having to pay for." Maynard noted that the government has had more than two years to make up its mind. He called for immediate special administration.

Prof Dieter Helm, an economist at the University of Oxford, doubted that a turnaround could be properly funded. He described further loans as postponing an inevitable special administration. A Thames Water spokesperson said the funding does not add costs for households. A London & Valley Water spokesperson stated that customer bills will not pay for the rescue financing. The costs are borne entirely by the class A creditors.