Fitch warns Thames Water's turnover is questionable

Thames Water boss Sarah Bentley quit unexpectedly in June. Credit: Thames Water/PA

The company was recently fined £3.3m. in July for dumping millions of liters of raw sewage into rivers near Gatwick Airport in 2017.

Judge Christine Laing KC found that Thames Water showed a deliberate attempt to mislead the EPA in connection with the incident.

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Fitch expects Thames Water to face 'significant' additional fines over the next two years, potentially amounting to £220m.

Feargal Sharkey, a rock star turned campaigner, told The Telegraph that Thames Water was «clearly way off its eight-year recovery plan and a million miles off target.»

The threat of re-nationalization of the UK's largest water supplier is also a stumbling block for self-help plans, warns Fitch.

Taking this as an «extreme and unlikely scenario», the ratings agency said any move to renationalize parts of the sector could result in «fewer private investors willing to invest in UK infrastructure» at a time of very high demand.

Thames Water raised £750m from investors last month but management said a further £2.5bn is needed by 2030.

Fitch said 'liquidity and refinancing risks' are 'key challenges» for Parent Thames Water for 2025 and beyond.

Fitch analysts said: «The challenges are complex and the results are uncertain.»

Last month, Thames Water chief executive Katherine Ross said she had enough money to get through «this year, next year and the future.»

Latest results show £4.4bn in cash reserves.

Comparison of UK water company debt

Fitch's concerns follow previous warnings from Ofwat chief executive David Black , who said that the amount Thames aims to raise will not be enough in the long run.

He told a House of Lords committee that Thames Water was struggling to raise funds because investors were «worried» about its restructuring plan.

Mr Black also stressed that the company would have to cut its debt while raising performance.

Thames Water's investors include the Ontario Municipal Employees Retirement System (Omers), the UK University Pension Scheme and the China Investment Corporation.

Last month, Omers reduced the value of its investments in Kemble, parent company of Thames Water, by 20%.

Thames Water was formerly owned by private equity giant Macquarie, which has been criticized for increasing Thames Water's debt while paying a lucrative dividend.

Macquarie more does not own a stake in the company.

Katherine Ross and Alastair Cochran, co-CEOs of Thames Water, said the supplier is in a «strong financial position» and «extremely fortunate to have such supportive shareholders.»