Britain’s water regulator Ofwat has said Thames Water needs to improve its financial resilience, but it insists the company still has strong liquidity.
In a statement issued a day after the government held emergency talks about the future of country’s biggest supplier, an Ofwat spokesperson said:
“Over the last day or so, there has been a lot of commentary about financial resilience in the water sector with considerable focus on Thames Water in particular.
“We have been clear that Thames Water has significant issues to address – their environmental record and leakage performance, for example, are poor. Alongside the turnaround of their operational performance, they need to improve their financial resilience too.
“But that is all in the context of a company that has strong liquidity – it recently received an additional £500 million from shareholders and has £4.4bn of cash and committed funding.
“Overall, the sector is continuing to attract international capital and is especially attractive to long term investors such as pension funds. Indeed, there has been an additional equity injection of around £2bn since 2020, with companies acting to strengthen their financial position.
Ofwat adds that it will continue to keep companies’ financial resilience under “close scrutiny” and ensure companies take action to ensure that they have the financial backing to deliver for customers and the environment.