Thames Water creditors seek talks with Burnham as nationalisation looms
A consortium of investors pursuing a rescue bid for Thames Water is open to discussions with Prime Minister Andy Burnham regarding public control, while preparing for potential leg
By The Guardian
Thames Water creditors have expressed a willingness to engage in discussions with Prime Minister Andy Burnham about increasing public control of the company, while also preparing for a potential multi-billion pound legal battle should the firm be nationalised. London & Valley Water, a consortium of 100 institutional investors holding £17 billion of Thames Water's £21 billion debt, confirmed its openness to government involvement but clarified that it does not support full public ownership of the struggling utility.
Mike McTighe, a turnaround specialist leading the governance overhaul, stated that UK and international investors are keen to collaborate with incoming ministers to restore confidence in the heavily indebted company. The consortium, which includes notable firms such as Apollo Global Management and Elliott Management, plans to present a revised takeover proposal once Burnham appoints his cabinet.
Reports indicate that London & Valley Water has engaged litigation specialists Pallas Partners to explore legal options if the government opts for special administration or nationalisation instead of their bid. However, no legal action has been initiated at this time, with sources close to the consortium describing the preparations as precautionary while the government deliberates between private restructuring or public control.
Thames Water has warned that its funding could be depleted by November, currently having £1.1 billion available while creditors await further action pending Burnham's transition into office next week. The latest rescue proposal from the consortium would see creditors maintain control before eventually returning Thames Water to private ownership through a stock market listing in approximately five years.
The investors assert that existing legal protections would necessitate full compensation for senior creditors if Thames Water were to be permanently nationalised.