Thames Water said it has raised £750m from shareholders as it seeks to pay its large debt pile and avoid being taken into public ownership.
But the supplier warned it would need a further £2.5bn by 2030 for its turnaround to be completed.
The £750m, announced on Monday and aimed at seeing the supplier through to March 2025, is in addition to £500m raised in March this year.
Thames, which has a debt pile of some £14bn, described the latest cash boost as a “major milestone”, although it admitted “significantly” greater support would be needed for its turnaround to be delivered.
The funding agreement came as its annual results laid bare the financial woes at the group, with debts swelling to £14bn from £12.9bn the previous year and remaining in the red with underlying pre-tax losses of £82.6m for the year to 31 March.
Cathryn Ross and Alastair Cochran, interim co-chief executives of Thames Water said: “This announcement is a major milestone for Thames and all our stakeholders.
“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.”
Last month it was reported that the company, the country’s largest supplier with some 15 million customers, could be nationalised.
Government ministers were said to be drawing up contingency plans in the event that Thames, which supplies London and the Thames Valley, collapsed.
Ministers and regulator Ofwat had started talks about putting Thames Water into special administration.
Utility giant Thames Water has said its shareholders agreed to pump in another £750 million in funding, but warned another £2.5 billion will be needed by 2030— (PA)
The news came after chief executive Sarah Bentley announced she was stepping down with immediate effect after three years in the job.
She was forced to give up her bonus after the company’s environmental and customer performance suffered.
Thames Water had been found to have discharged raw sewage into rivers where it operates.
It has also come under intense scrutiny in recent years because of its bad record on leaks, sewage contamination, executive pay and shareholder dividends.
Despite giving up her bonus Ms Bentley, netted £1.6m in pay and compensation.
Energy supplier Bulb, which had around 1.5 million customers, collapsed in 2021 and was placed into a similar insolvency process.
Thames Water’s bigger size sparked fears that the insolvency process could cost billions of pounds.
Water industry ownership restrictions that prevent consolidation mean the money spent on the bailout of Bulb could be dwarfed if Thames Water was to fail.
Ms Ross, speaking to BBC Radio 4 Today on Monday morning after the announcement was made, dismissed suggestions the company was at the point where it could be nationalised.
“Not at all,” she said when asked how much of a “hole” the company was in.
“We have a £4.4bn liquidity pile that we are sitting on. That money is there if we need it…it’s absolutely enough to pay everything we think we need to pay.”
