Thames Water has been given a £750m cash injection from its shareholders as the struggling utilities company tries to avoid the threat of nationalisation.

Investors have also acknowledged another £2.5 billion will be needed in following years for its turnaround to be delivered, having pumped £500m into the business last year.

Investors have acknowledged they will need to put more money into the troubled provider as part of its long-running turnaround strategy, having pumped £500m into the business last year.

In an update to shareholders, Thames Water said the funding was subject to the “preparation of a business plan that underpins a more focused turnaround”.

The company’s former chief executive Sarah Bentley left the role with immediate effect earlier this month shortly before it emerged the utilities company was struggling to service its £14bn debt pile.

Bosses said that as of March the company had £4.4bn of cash in the bank and committed funding.

Interim-chief executives Cathryn Ross and Alastair Cochran said: “This announcement is a major milestone for Thames and all our stakeholders.  

“Since June 2022, we have engaged constructively with shareholders, working towards a common goal of developing a long term, comprehensive, financeable and enduring business plan for the company to improve operational performance and financial resilience for the benefit of our customers and the environment.

The substantial equity support package announced today will underpin the delivery of a more focused turnaround plan that builds on the foundations that have been put in place over the last two years and focuses expenditure on a smaller number of initiatives, which will deliver material and sustainable improvements in key performance metrics over the next three years.”

Thames Water’s owners include Ontario Municipal Employees Retirement System, the UK’s Universities Superannuation Scheme and China Investment Corp. 

More to follow...