Key facts
- Thames Water's lenders are preparing a legal challenge against potential nationalisation by Prime Minister Andy Burnham.
- A creditor group, including Apollo and Elliott, holds approximately £17bn of the company's £21bn debt.
- The creditors' revised proposal includes a £3.35bn equity injection and £9.6bn debt write-off.
- Thames Water anticipates running out of cash before year-end without a funding solution.
- Creditors are prepared to continue financing the company into 2027.
Thames Water's lenders are reportedly preparing a legal challenge against Prime Minister Andy Burnham's potential nationalisation of the utility. The creditor group, which holds approximately £17bn of Thames Water's £21bn debt, remains confident in presenting a revised takeover proposal to the government. This group, including Apollo Global Management and Elliott Management, has continued developing its plans after the previous environment secretary criticised an earlier restructuring offer. While contingency planning for legal action is underway, no lawsuits have been filed, with creditors viewing this as a precautionary measure. Thames Water itself faces an urgent need for a long-term funding solution, as its cash reserves are expected to be depleted before the end of the year. Creditors have indicated their willingness to provide financing into 2027. The company's latest proposal involves the creditors taking control and eventually relisting Thames Water on the stock market. However, neither Thames Water nor the creditor consortium has yet engaged with Burnham's team regarding their plans.