UPDATE 1-UK's Thames Water earnings rise, says still working on recapitalisation plan

Britain's Thames Water said its talks with government and regulators to agree a recapitalisation deal were ongoing after it posted a rise in half-year earnings and said pollution spills had fallen by a fifth. Senior creditors in the country's biggest water company which has 16 million customers want to write-off debt and invest new equity in a last-ditch plan to help it avoid nationalisation.

Britain's Thames Water said its talks with government and regulators to agree a recapitalisation deal were ongoing after it posted a rise in half-year earnings and said pollution spills had fallen by a fifth.

Senior creditors in the country's biggest water company which has 16 million customers want to write-off debt and invest new equity in a last-ditch plan to help it avoid nationalisation. Thames Water said on Wednesday its turnaround was making progress and it was investing to improve its environmental performance, while its earnings were boosted by a regulated price rise and better operational expenditure control.

The company has become a symbol of failure in the country's water sector - blamed for sewage pollution, while its 20 billion pounds of debt have left it teetering on the brink of financial collapse since 2023. Senior creditors have been in talks with regulators and the government over their rescue plan for months, and Thames Water said work continued on that front.

"We continue to work closely with stakeholders to secure a market-led solution that we believe is in the best interests of our customers and the environment," CEO Chris Weston said. The turnaround plan put forward by institutional investors including Aberdeen Investments, Elliott, PIMCO and Silverpoint Capital is the last option on the table for Thames Water to avoid the government's special administration regime after financial investor KKR pulled out earlier in the year.

For the six months to 30 September, Thames Water reported underlying core earnings (EBITDA) of 1.2 billion pounds compared to the 715 million pounds it made on the same basis last year.

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