Thames Water has warned it will run out of money by November unless a rescue deal is agreed, as investors caution that temporary nationalisation would hinder its recovery. The company says it is close to securing a plan led by creditors, which requires a six-week consultation with regulator Ofwat over the summer, followed by a month to consider responses.
The London & Valley Water consortium, representing creditors, argued that special administration—a form of temporary nationalisation—would delay improvements. The group stated that Thames Water needs £10bn to stabilise, fund upgrades, and clean up rivers, and that a market solution is the fastest route without government funding or taxpayer cost.
Comments from Greater Manchester Mayor Andy Burnham, who suggested renationalising water and energy if he became prime minister, have added pressure. Burnham told Channel 4 News that a 'different path completely' was needed, advocating stronger public control over utilities. His remarks contributed to a sharp fall in water company shares on Friday, with Severn Trent and Pennon dropping over 8% and United Utilities falling more than 6%.
Thames Water has struggled for over two years, carrying £17.6bn debt since privatisation. A previous attempt to sell the company collapsed last year when preferred bidder KKR pulled out. Ofwat is reportedly set to accept 'undertakings' from the firm, requiring it to fix underlying issues rather than pay penalties, though the deal faces ongoing pressures.
