Key facts
- A creditors' group, London & Valley Water (L&VW), has proposed new board appointments for Thames Water.
- Proposed appointees include former Yorkshire Water CEO Liz Barber and ex-BT Openreach boss Clive Selley.
- The L&VW consortium, backed by investors like Apollo and Elliott, aims to keep Thames Water privately owned.
- Their plan includes reinvesting all profits and foregoing dividends for 10 years.
- The government is considering nationalisation via special administration, which would cause substantial investor losses.
A group of creditors seeking to take control of Thames Water has announced plans to appoint new leadership to the utility's board if their takeover bid is successful. The consortium, known as London & Valley Water (L&VW) and including major investors such as Apollo and Elliott, aims to prevent the government from placing the company into special administration.
Should their turnaround plan be approved, L&VW intends to install Liz Barber, the former chief executive of Yorkshire Water, and Clive Selley, previously the head of BT Openreach, as non-executive directors. They would be joined by turnaround specialist Mike McTighe, who has been advising Thames Water, and Dame Bernadette Kelly, a former Permanent Secretary at the Department for Transport.
Mike McTighe acknowledged the significant challenges facing Thames Water, stating that the proposed new board would be dedicated to transforming the business and prioritizing customers and local communities. The L&VW's proposal envisions Thames Water remaining under private ownership and eventually being relisted on the London Stock Exchange. As part of this plan, investors have committed to reinvesting all profits into the company and foregoing dividends for a decade.
However, the company faces a critical juncture as ministers are reportedly considering a special administration regime, a form of temporary nationalisation. This move would likely impose substantial losses on Thames Water's investors. The utility is currently burdened by approximately £20 billion in debt and has warned that it could exhaust its cash reserves by the end of the year. Earlier this year, former environment secretary Emma Reynolds had dismissed L&VW's turnaround plan.