A group of creditors aiming to take control of Thames Water has proposed a new board structure. This comes as the utility faces the possibility of nationalisation. The London & Valley Water (L&VW) consortium holds £17 billion of Thames Water's £21 billion debt. They announced plans to appoint four new directors if their £10 billion rescue deal is approved by the government.
Key Details
The proposed board members include Liz Barber, former chief executive of Yorkshire Water, Clive Selley, ex-CEO of Openreach, Dame Bernadette Kelly, former permanent secretary at the Department for Transport, and Mike McTighe, a turnaround specialist who currently advises Thames Water. McTighe stated, "The challenge at Thames Water is huge. If this recapitalisation plan is accepted, we will apply full dedication as a new board, working alongside the executive team to transform the business and build a culture in which the customers and local communities who depend on Thames Water come first."
The creditors' plan aims to prevent the company from entering a special administration regime. This regime is a form of temporary nationalisation that would impose significant losses on investors. Thames Water has been struggling under a £20 billion debt load and warned it could run out of cash by October. The company serves 16 million customers in London and the southeast.
Background
Andy Burnham, the new prime minister, has shown a desire for greater public control over utility companies. This raises the prospect of nationalisation. Critics, including the public ownership campaign group We Own It, have dismissed the creditors' proposal. They see it as a mere reshuffling of leadership rather than a real solution.
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The ongoing uncertainty about Thames Water's future could affect investor sentiment in the utility sector. This is especially true as the government considers nationalisation options. A shift to public ownership could lead to significant financial losses for current creditors and impact related utilities. Investors will closely watch the government's decision on the proposed rescue plan and any upcoming regulatory actions.
Based on reporting by: theguardian.com, cityam.com