Thames Water: Ofwat to take fresh steps against debt-riddled UK water firm including appointing an independent monitor

The monitor would have access to the company’s financial information and would report back to the regulator. The appointment comes after Thames Water’s credit rating was downgraded twice by ratings agencies Moody’s and S&P in July which constitutes a breach of its licence to operate, the regulator said.

Agreeing to a monitor is one of four commitments Ofwat wants Thames to comply with, which also include developing a “suitable” business plan to turn around the struggling business. The watchdog said Thames must agree to “taking the steps required to deliver an equity raise”, and appointing new non-executive directors to its board.

David Black, chief executive of Ofwat, said: “We are clear that Thames Water needs to remedy its licence breach, turnaround its operational performance and secure backing from investors to restore its loss of investment grade credit rating. These enforceable commitments will include our putting an independent monitor into the business, to report back to us on what is happening to drive meaningful change in performance, and to ensure appropriate expertise is added to their board.

“We will continue to monitor progress very closely and will not hesitate to take any further action if necessary.” The measures come as part of a previously announced “turnaround oversight regime” floated by Ofwat for Thames last month. The regulator also opposed the company’s planned 44 per cent rise in consumer bills over the next five years, telling Thames it should instead increase average yearly bills by 23 per cent to £535 over the period.

The water firm is currently in the grip of a funding crisis and has more than £15 billion of debt. It said in July that it only has enough money to continue trading until the end of May 2025. Bosses are scrambling to secure a major cash injection to keep it afloat, and have held talks with both existing shareholders and outside investors.