2nd Oct 2025 08:28
(Alliance News) - A group of Thames Water lenders has put forward a new rescue deal for the struggling supplier pledging an extra GBP1 billion in investment, and plans to write off around a third of the firm's near-GBP20 billion debt pile.
London & Valley Water – a consortium of the supplier's main creditors, including investors and financial institutions – said its offer was "more ambitious, delivers greater value for customers and follows three months of discussion with and feedback from Ofwat" to help turn around Thames Water.
The group said its extra GBP1 billion of investment, on top of the proposal submitted in May, would "ensure long-term financial resilience" and cover existing fines Thames Water must pay for regulatory and pollution failures.
The group outlined plans to eventually float Thames Water on the stock market, but vowed not to sell the company before March 31 2030 to ensure a focus on turning it around first.
Thames Water – Britain's biggest water supplier with 16 million customers – is on the brink of nationalisation as it struggles under a mountain of debts.
The creditors are looking to secure backing for their plans to avoid Thames Water being put into a temporary special administration regime, SAR, which would effectively wipe out their investments.
The creditors are the bondholders who now effectively own Thames Water after the High Court approved a financial restructuring earlier this year through a loan of up to GBP3 billion to ensure it can keep running until the summer of 2026.
The firms involved, which include US and UK investment firms such as Elliott Management and US private capital firm Apollo Global Management, submitted their improved bid plans to regulator Ofwat on Wednesday.
Mike McTighe has been named proposed chair of Thames Water should the bid be accepted, with five directors earmarked to join the supplier's board.
McTighe said: "There is a huge amount of work to be done to turn around Thames Water and deliver the improved service and environmental outcomes that customers and local communities deserve.
"From day one, we will inject billions in new investment, strengthen Thames Water's balance sheet, transform the company for thousands of hard-working frontline staff and begin the delivery of an operational turnaround that puts 16 million customers and the environment first.
"Together with committed and experienced new investors, the collective focus of the new board under London & Valley Water's plan will be on fixing the foundations, reducing pollution and rebuilding public trust so that by the end of this decade Thames Water can once again be a reliable, resilient, and responsible company."
Chris Weston, chief executive of Thames Water, said: "Today is an important milestone in our ongoing work with creditors and stakeholders to secure a market-led recapitalisation that establishes the financial and regulatory foundations required to support the investment and performance improvements our customers expect."
By Holly Williams, PA Business Editor
Press Association: Finance
source: PA
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