Thames Water provides drinking water and waste water services to 15 million customers in London and the southeast of England. The utility, which counts one of Canada’s largest public pension funds among its top investors, has around £14 billion of debt on its balance sheet.
The firm “is continuing to work constructively with its shareholders in relation to the equity funding expected to be required to support Thames Water’s turnaround and investment plans,” it added. One possibility would be to place the company into a special administration regime that effectively takes the firm into temporary public ownership. Sky News was first to report the discussions.
Other large investors include the Chinese and Abu Dhabi sovereign wealth funds, as well as British Columbia Investment Management Corporation, which invests on behalf of public sector workers.UK water companies have racked up debt of more than £60 billion since being privatized three decades ago, according to Ofwat. The sector is now under pressure as interest rates rise and more income from customer bills is diverted toward servicing debt.
The government’s approach to regulating utilities, many of which were privatized in the 1980s and 1990s, has been thrown into relief by the company’s financial troubles, as well as by the temporary nationalization in 2021 of a major energy provider, Bulb. It was briefly run by administrators before being sold to Octopus Energy last year.