Investors in Thames Water have expressed willingness to discuss greater "public control" of the utility as incoming Prime Minister Andy Burnham considers temporary nationalisation of the debt-laden company. Turnaround specialist Mike McTighe, representing the largest group of Thames Water creditors, stated that UK and international investors are ready to collaborate with the new government to "rebuild confidence" in the firm.
Creditors' Proposal for Enhanced Public Control
McTighe said: "We are keen to meet new ministers as soon as possible to discuss how we can work together in the best interests of customers, including by enhancing public control of the company's operations." He added that creditors remain prepared to recapitalise Thames Water, return it to investment grade, and begin the turnaround process, but urgently need government engagement.
Burnham, who becomes prime minister on Monday, has previously advocated for greater public control of key utilities, including water. Reports suggest he may temporarily nationalise Thames Water by placing it into a special administration regime (SAR), given its £20 billion debt pile.
Financial Struggles and Rescue Plan Challenges
Last week, Thames Water's annual report highlighted "material uncertainty" about its ability to secure sufficient liquidity to sustain operations until a rescue plan is finalised. A creditor-led rescue plan is seen as the last realistic option to avoid an SAR, after a previous deal with US private equity firm KKR collapsed in May last year. However, Environment Secretary Emma Reynolds last month warned that the creditors' £10 billion plan does not go far enough to protect customers or the environment.
Thames Water has warned that an SAR could require taxpayers to fund the business with £2 billion by the end of next year, according to the Sunday Times. Creditors are reportedly willing to discuss further concessions to their rescue plan to avoid burdening taxpayers with the cost of maintaining operations and repairing ageing infrastructure.
Commitment to Rebuilding Trust
McTighe, who is leading governance reforms at Thames Water, said: "It will take time to fix a complex business like Thames Water, but we are committed to rebuilding trust with the customers and public we serve."
