Key facts
- Environment Secretary Angela Eagle held initial talks with Thames Water chiefs regarding the company's financial situation.
- Ministers are prepared to change legislation to reform the water industry and potentially take Thames Water into public ownership.
- Thames Water is struggling under a £20 billion debt pile and faces a potential £10 billion debt renegotiation deal with its owners.
- The company has been fined a record £122.7 million for sewage spills and unlawful shareholder payouts.
- Creditors are proposing a rescue plan that includes appointing four new directors to Thames Water's board.
Environment Secretary Angela Eagle has held initial discussions with the leadership of Thames Water as the company grapples with a significant financial crisis. Ministers are considering legislative changes and the possibility of nationalising the water supplier if its owners fail to secure a deal to renegotiate its substantial debts.
Thames Water is burdened by a £20 billion debt pile. Its owners, which include major hedge funds such as Elliott Management and Apollo Global Management, are reportedly seeking a £10 billion deal to restructure the debt and avoid government intervention. The company has also faced penalties, including a record £122.7 million fine for sewage spills and unlawful shareholder payouts.
Eagle stated that while special administration is an option, it is complicated by the fact that Thames Water is not technically insolvent. She indicated that the current Water Act may not adequately address the behaviour of corporate owners seeking debt renegotiation. A forthcoming water bill could provide a legislative vehicle for potential reforms or actions.
Creditors have put forward their own rescue plan, which includes appointing four new directors to Thames Water's board, should their bid be approved. Among the proposed directors are former Yorkshire Water chief executive Liz Barber, former Department for Transport permanent secretary Dame Bernadette Kelly, and ex-BT Openreach chief executive Clive Selley.