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Thames Water says cash runs out soon as debt climbs
The UK water company reported a £113m post-tax profit for the year to March, but net debt rose to £18.5bn and it said existing funding covers operations only until end-2026.
Thames Water, the UK water supplier, warned that its available cash runs only until the end of this year, while its debt continues to grow and customer bill income is not enough to cover the infrastructure upgrades it says are required after years of underinvestment, according to BBC Business.
The company reported a post-tax profit of £113m for the 12 months to the end of March, after a £1.51bn post-tax loss in the prior year. Even with the swing back to profit, net debt increased to £18.5bn from £16.8bn, and Thames Water said it has enough debt funding to keep the business going until the end of 2026.
BBC Business reports that lenders have proposed a rescue deal involving potential debt write-offs and new cash injection in exchange for leniency on environmental targets, arguing that fines tied to targets would undermine continued funding if problems persist. Environment Secretary Emma Reynolds rejected the plan as weak and said it does not offer enough protection for consumers and the environment.
A second path is a form of administration with government-appointed officials running the company, which would shift some debt responsibility to the state and require billions of pounds of public investment, BBC Business added. The BBC also noted that Andy Burnham, expected to become prime minister on Monday, has previously called for Thames Water to be nationalised, but the article said public control could also mean tighter regulation or borrowing caps that could make financing upgrades harder.