On August 12, 2025, UK ministers appointed FTI Consulting to advise on contingency strategies should Thames Water, the nation's largest water utility serving 16 million people, teeter toward collapse. The firm is burdened by some £17.7 billion in debt and over £1 billion in regulatory penalties linked to infrastructure failures. Tensions escalated following the abrupt exit of lead investor KKR, prompting intensified efforts to raise capital from existing bondholders.
The government is keen to avert placing Thames Water into a Special Administration Regime (SAR)—a step that would require court approval and could cost taxpayers up to £4 billion initially, though legislation allows these costs to be recouped later via customer bills. Thames Water maintains its commitment to a privately led recapitalization aimed at restoring long-term stability. However, critics—including the GMB union—point fingers at privatization and financial mismanagement for the crisis and urge state intervention to safeguard water services, jobs, and pensions. Despite the financial turmoil, officials assert that the company remains operationally stable—for now—while contingency arrangements are firmly in place.
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