Thames Water creditors approve a plan to take its emergency funding facility to £5.4bn

Thames Water Utilities Limited (TWUL) has won creditor approval for its sixteenth consent requests and the related STID proposals. That lets it proceed with changes to its super senior funding facility (Thames Water). The result was announced on 30 October and reported more widely on 2 November (Water Magazine).

£5.4bn

Source: Thames Water ↗

What we know

The details are in the 15 October launch notice (Thames Water):

• Starting point: the facility had a maximum of £3bn (£1.5bn of original commitments plus a £1.5bn accordion), of which £2.65bn had been drawn.
• The runway problem: without more money, Thames expected the facility to last only until the end of 2026 or early 2027, and it does not expect its recapitalisation to complete before then.
• The upsize: a further £2.4bn, taking the potential maximum to £5.4bn and extending liquidity "into Autumn 2027". Commitments will be sought in tranches, and each upsize drawdown needs creditor consent at the time.
• New vehicle: Thames Water Super Senior Upsize Issuer PLC, a subsidiary of the existing Super Senior Issuer, will raise further super senior debt and lend it to TWUL on a pari passu basis.
• Near-term cash: the approvals waive outstanding conditions to release £350m and extend the June Release Condition to 30 November 2026, which would allow a further £350m in November.

There is one caveat. Thames Water Limited, as subordinated creditor, says one of the amendment consents does not bind it. The company states that the STID proposals still bind the secured creditors and obligors (Thames Water).

What others are reporting

Reuters, via Devdiscourse covered the launch. It put the company's debt at about £20bn and noted that the senior creditors' rescue plan involves debt writedowns and new equity, partly to avoid temporary government control. It also reported that the creditor consortium, London & Valley Water, named proposed directors in August. Water Magazine reported the approval as the latest in a run of consent processes.

Background

The upsize sits alongside a separate deal agreed on 16 October with Class B creditors (Thames Water). Holders of over 60% of Class B debt agreed to write off about £1bn in exchange for equity worth a c.5.9% recovery and rights in £150m of new equity, if a recapitalisation goes ahead. Thames says its stable platform period expires in March 2027 and it lacks certainty that the recapitalisation (via a second restructuring plan, "RP2") can be done before then, so it plans to extend it. No decision has been taken by the board, Ofwat or other regulators to accept any London & Valley Water proposal.

The political backdrop is hostile. In September the EFRA Committee urged ministers to reject the roughly £10bn creditor-led bid and to change the law so special administration could be triggered on performance grounds before insolvency. A Defra spokesperson said "nothing's off the table" (Irish News/PA). Operationally, Thames had a one-star 2025 environmental rating, the sector's highest count of serious pollution incidents (24) and completed 24.5% of its WINEP schemes on time (Environment Agency).

What we don't know yet

Thames has not published the cost of the new super senior debt, who will provide the upsize tranches, or a date for launching RP2.

What to watch

• Whether the £350m November draw goes ahead by the 30 November deadline.
• Launch of the stable platform period extension ahead of March 2027.
• Any Ofwat public consultation on a recapitalisation. Class B support depends on one being launched by 30 December 2027.
• The government's response to EFRA's call for performance-based special administration powers.