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Thames Water’s Rescue Deal Hangs in Balance After £1.65bn Loss and Pollution Surge

Appealing record Ofwat fines, Thames Water seeks a regulatory reset to secure a senior creditors’ recapitalisation to stave off special administration

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Thames Water admitted that its sewage pollution incidents increased last year by a third, to 470
Ashley Book, Head of Waste Operations at Mogden Catchment, looks at settlement tanks used to process sewage water from over two million people, at Mogden Sewage Treatment Works, operated by Thames Water, in west London, Britain, June 4, 2025. REUTERS/Toby Melville

Overview

  • Thames Water posted a £1.65bn annual loss in the year to March, reversing a previous profit and absorbing a £1.27bn write-off on intercompany loans.
  • Net debt climbed to £16.8bn driven by hefty restructuring fees, regulatory fines and financing charges.
  • Sewage pollution incidents surged 34% to 470 as above-average rainfall overwhelmed its ageing network.
  • The board issued a going-concern warning and cautioned that a failed recapitalisation could trigger special administration.
  • Chief Executive Chris Weston said stabilising the business will hinge on creditor support, a regulatory reset and a turnaround that could span at least ten years.