In a statement to the stock market on Thursday, Thames Water said it "does not expect to complete its recapitalisation process ahead of this date", meaning it would need emergency funding to bridge the gap. The utility, which serves 16 million customers in London and the Thames valley, has been on the brink of collapse for years under a debt pile of about £20bn.
Shareholders have walked away, leaving the company under the effective control of its creditors, a group collectively called London & Valley Water and led by American hedge funds including Elliott Management and Silver Point Capital, along with institutional investors such as BlackRock and M&G. Those creditors provided a £3bn lifeline in February last year, of which Thames has already drawn down £2.65bn, leaving it perilously close to running out of cash while it carries out expensive repairs and upgrades.
The company said the extra cash would "extend liquidity into autumn 2027" and allow it to continue its capital programme and deliver improvements for customers and the environment.
The creditors' rescue plan would involve writing off £4bn in loans, but it hinges on Ofwat agreeing to let the company off pollution fines for several years, a prospect that has proven politically unpalatable for the Labour government. Some Labour politicians and environmental campaigners have called on Keir Starmer and Andy Burnham to put Thames Water into special administration, a form of temporary government control while a new buyer is sought. Burnham has pledged more public control of the UK's water industry and has said public ownership of Thames Water "is what should be done".