𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Troubled Thames Water said it has enough funding until October despite its debt mountain ballooning close to £20 billion.

The UK’s biggest water supplier, serving 16 million customers across London and the South East, reported pre-tax profits of £226.4 million for the year to March 31, a marked improvement from last year’s £1.65 billion loss.

However, full-year results showed debts swelled to £19.77 billion, up from £17.73 billion, as the group continued to draw down funds for capital investment.

Creditors are battling to secure a rescue deal for Thames Water after Environment Secretary Emma Reynolds warned last month that the plan for the stricken utility did not go far enough to protect customers or the environment.

This warning delivered a last-minute blow to hopes of a deal to stave off temporary renationalisation.

Ofwat was reportedly close to accepting an offer from London & Valley Water consortium, which proposed injecting £10 billion into the debt-laden company in return for a four-year waiver on any new fines over sewage leaks.

Chief executive Chris Weston told the Press Association Thames Water has enough funding until October and is relying on creditors for support as they battle to secure a rescue takeover to stave off temporary nationalisation of the debt-laden supplier.

Mr Weston said: “Thames Water today is a very different business from what it was two years ago.

“While we have a lot more to achieve, the progress we have made in turning the company around has meant we are now performing better and are in a strong position to accelerate the delivery of the biggest upgrade of our infrastructure in 150 years.”

He added: “While operationally the business is improving, we are also working with our creditors, regulators and Government to complete our recapitalisation.”

Mr Weston has called for urgent clarity from prime minister-in-waiting Andy Burnham over his plans for the sector as he revealed the stricken utility could run out of cash within months unless a funding deal is struck.

Mr Burnham, who is expected to be appointed prime minister as soon as next Monday, has signalled he wants to bring in a 10-year plan to renationalise the water industry, saying reform is needed to put the public interest first, leaving a question mark over plans for Britain’s biggest water supplier.

Creditors have already been sent back to the drawing board after Environment Secretary Emma Reynolds last month warned she did not believe their £10 billion plan for Thames Water goes far enough to protect customers or the environment.

Mr Weston told PA the group is in discussions with creditors about extending funding into 2027 to allow more time for the deal, but said clarity from Government is needed, and “the sooner the better”.

He said: “The big unknown is what the new prime minister wants to do when he comes in. We’ve had no conversations with him and it would be better to know what he’s thinking.”

He said while the situation is “not terminal”, he stressed the utility’s funding situation is “not sustainable”.

Thames Water said: “Bills alone cannot fund the required investment: Thames Water still needs debt funding, creditor support, and ultimately a recapitalisation.”