Key facts
- Thames Water creditors offered the government a 'golden share' and local oversight to prevent nationalisation.
- The offer comes from London & Valley Water (L&VW), a consortium of 100 institutional investors holding £17bn of Thames Water's £21bn debt.
- The 'golden share' would give the government a veto over important decisions and hostile takeovers.
- The proposed rescue deal includes a 10-year dividend freeze for investors and an expanded social tariff for households.
- This proposal aims to avoid a special administration regime, which creditors estimate could cost taxpayers £4bn.
- Thames Water serves 16 million customers and is struggling with significant debt.
Thames Water creditors have put forward a 'golden share' offer to the government as a last-ditch effort to prevent nationalisation. The consortium, known as London & Valley Water (L&VW) and comprising 100 institutional investors, holds £17bn of the company's £21bn debt. They propose granting the government veto power over key decisions and hostile takeovers, alongside enhanced local government oversight, to demonstrate commitment to public control and accountability.
This proposal comes as Thames Water struggles with substantial debt and has warned of insufficient cash to operate. Reports suggest that Andy Burnham, a government minister, is planning to place the utility into a special administration regime, a move creditors estimate could cost taxpayers up to £4bn. The L&VW rescue plan includes a commitment for investors to forgo dividends for 10 years and an expansion of the social tariff to reduce bills for struggling households.
The creditors aim to present a revised proposal to ministers, highlighting their plan as a swift and reliable solution that avoids taxpayer funding while improving customer and environmental outcomes. This offer follows a previous failed attempt to sell the utility and concerns raised by former environment secretary Emma Reynolds regarding earlier deal terms.