Key facts
- Thames Water creditors are open to discussing greater public control.
- Incoming Prime Minister Andy Burnham is considering placing Thames Water into special administration.
- This special administration could cost taxpayers up to £4 billion.
- Creditors hold £17 billion of Thames Water's £21 billion debt.
- Creditors have hired legal firms to prepare for a potential nationalisation.
- Creditors aim to pursue a solvent restructuring to avoid taxpayer-funded administration.
Thames Water creditors are signalling a willingness to discuss enhanced public control over the company as incoming Prime Minister Andy Burnham reportedly prepares to place the struggling utility into special administration. This move could potentially cost taxpayers up to £4 billion.
The consortium of 100 institutional investors, known as London & Valley Water (L&VW), holds £17 billion of Thames Water's £21 billion debt. Mike McTighe, the turnaround specialist leading the creditors' efforts, expressed a desire to meet with new ministers to explore working constructively, including through greater public control of operations, to rebuild confidence.
Burnham's potential special administration regime (SAR) would transfer the company's running costs to the taxpayer. Creditors, however, are preparing for a potential multi-billion pound legal battle and are also pursuing a solvent restructuring to avoid a taxpayer-funded administration process. They have hired litigation firm Pallas Partners and law firm Akin Gump to bolster their legal position.
McTighe stated that the consortium remains ready to recapitalise Thames Water and return it to investment grade, urging government engagement. The future of Thames Water, which serves 16 million customers and is burdened by significant debt, will be a key early challenge for Burnham's administration.