Thames Water owner could run out of money by 2024 as it insists supplies are not at risk.

The owner of Thames Water, Britain’s largest water utility, will face a cash crunch in April unless shareholders inject more capital into the debt-ridden business, accountants have warned.

PricewaterhouseCoopers said there was “significant uncertainty” about whether the group could continue to operate as a business amid questions over the refinancing of a £190 million loan at one of its subsidiaries.

Auditors warn there is “significant uncertainty” about the water utility over the repayment of a loan to Kemble Water Finance Ltd due in April next year. Owner Thames Kemble Water Holdings (KWH) said in its financial report it was confident the loan would be repaid, but PwC said no firm agreements had been made to refinance the £190 million loan.

The auditors say Thames’ owners say they have a letter from shareholders expressing their future support for the company, but note that the letter “has no legal effect and no other firm commitment to refinancing the business.”

Thames is expected to face criticism over its debt load when it announces results on Tuesday as investors question the troubled company’s financial structure. Parliament’s Environment, Food and Rural Affairs Committee said it was considering asking executives to explain whether they misled lawmakers about the company’s financial position when they gave evidence in July.

Ministers have drawn up contingency plans for the collapse of a water company amid fears the Thames will collapse due to high levels of debt.

Sir Robert Goodwill, the committee’s chairman, said he was considering a new investigation after it emerged Thames Water initially offered its parent company a loan from its shareholders as new equity financing.

Sir Robert said the new financial revelations had caused the committee to “question the accuracy of the evidence presented to our committee by Thames Water in July”. There are other concerns about the stability of the company’s finances and the company’s actual ability to invest the amounts of money needed to implement the turnaround plan, he said. “Our committee will consider whether we should call Thames Water again to explain how the evidence we have heard fits with the recent revelations,” he added. Thames Water said it had not misled the committee.

In the financial report, directors acknowledged there were “significant uncertainties” about the refinancing requirements but said they were “reasonably confident” Thames would “maintain sufficient resources to continue as an operating entity.”

Ofwat, which oversees only Thames Water, which publishes its half-year results on Tuesday, and not parent company Kemble Water Holdings, previously told Thames it needed to address its failure to meet water targets and strengthen its “financial strength”.

A Thames Water spokesman said: “We are in a strong financial position and are very fortunate to have such supportive shareholders.”

“In addition, they have agreed to provide a further £750 million of new equity funding through AMP7. This further funding is subject to certain conditions being met, including the creation of a business plan that supports a more focused turnaround delivering targeted performance improvements for customers, the environment and other stakeholders over the next three years, and is supported by appropriate regulation. .

“Our shareholders have also recognized the need for additional capital expenditure, which is expected to be around £2.5 billion in the eighth asset management period (April 2025). In total, this will equate to an equity investment of £3.75 billion, which is the largest package of equity support ever offered to the UK water sector.”