Thames Water shareholders have agreed to provide a further £750 million of equity funding in AMP7, with the acknowledgement that significant additional funding will be required during AMP8 (2025-2030), to further improve operational performance and financial resilience.
In accordance with the commitment made by shareholders in June 2022, Thames Water drew down £500 million of new equity funds on 30 March 2023. This latest commitment was made by shareholders to support the delivery of Thames Water’s business plan for the current AMP7 regulatory period ending 31 March 2025 to improve performance and outcomes for customers, reduce leakage, improve river health, and accelerate delivery of Thames Water’s turnaround. Thames Water says this equity funding provided by shareholders has helped reduce gearing to its lowest level in a decade.
Thames Water will carefully monitor progress towards satisfying the conditions for the additional shareholder funding and will keep under review pathways to ensure Thames Water’s continued financial resilience. In the meantime, Thames Water remains focused on delivering a safe and reliable service to its customers and the environment while work continues on implementing and accelerating the turnaround.
Thames Water says the company continues to maintain a strong liquidity position, including £4.4 billion of cash and committed funding, as at 31 March 2023.
Cathryn Ross and Alastair Cochran, Interim Co-CEOs of Thames Water said:
“This announcement is a major milestone for Thames and all our stakeholders. Since June 2022, we have engaged constructively with shareholders, working towards a common goal of developing a long term, comprehensive, financeable and enduring business plan for the Company to improve operational performance and financial resilience for the benefit of our customers and the environment. The substantial equity support package announced today will underpin the delivery of a more focused turnaround plan that builds on the foundations that have been put in place over the last two years and focuses expenditure on a smaller number of initiatives, which will deliver material and sustainable improvements in key performance metrics over the next three years.”
Ian Marchant, Chairman of Thames Water said:
“Our shareholders have consistently been very supportive of Thames Water by approving investment in the business over and above regulatory allowances, foregoing any income since 2017 and investing £500 million of new equity funding in March 2023. The additional investment announced today is the largest equity support package ever seen in the UK water sector and underscores our shareholders’ commitment to delivering Thames’ turnaround and life’s essential service for the benefit of our customers, communities, and the environment.”
