UK environment secretary objects to Thames Water rescue deal, nationalisation considered
10 reported
The UK environment secretary has objected to a £10bn rescue proposal for Thames Water, arguing it would place an “undue burden” on consumers and pushing the troubled utility closer to public ownership. Emma Reynolds wrote to Ofwat chair Iain Coucher on Monday raising concerns about the plan for the UK’s biggest water company, as she worries customers will lose out. Ofwat was close to a deal under which Thames would avoid new fines over sewage leaks for four years in return for a cash injection from creditors who would take over the company. Reynolds stated in the House of Commons that she does not believe the current proposal goes far enough to protect customers and the environment, citing unfair costs to customers, delays to infrastructure investments, and delays to environmental improvements. On Tuesday, 107 MPs, including 42 from Labour, signed an open letter calling for the deal to be rejected and for the company to be brought into a special administration regime, a form of temporary nationalisation. The consortium of hedge funds, London & Valley Water, pushed back, stating its plan is the fastest route to improve outcomes without government funding or cost to taxpayers. A Thames spokesperson said the company will continue working with all parties to reach an agreement that supports long-term financial stability.
What’s reported
Environment secretary Emma Reynolds objected to a £10bn rescue proposal for Thames Water.
Reynolds wrote to Ofwat chair Iain Coucher on Monday raising concerns.
Ofwat was close to a deal that would avoid new fines over sewage leaks for four years in return for a cash injection from creditors.
Reynolds said Thames customers have been let down for 15 years of underperformance and increasing pollution.
107 MPs, including 42 from Labour, signed an open letter calling for rejection of the deal and temporary nationalisation.
The consortium London & Valley Water includes Elliott Investment Management, Silver Point Capital, BlackRock, and M&G.
The consortium’s plan would inject £3.35bn of new equity and up to £6.55bn in new debt.
Thames would pay nearly £750m to creditors, lawyers, and advisers as part of the restructuring.
Thames serves about 16 million people in London and the south of England.
Thames has £17.6bn of debt and is close to collapse.
Key figures
Emma Reynolds, UK environment secretary
Iain Coucher, chair of Ofwat
Victoria Atkins, Conservative shadow environment secretary
Andy Burnham, Labour leadership candidate
Paul Singer, billionaire hedge funder and Trump donor, runs Elliott Investment Management
Cliff Roney, GMB activist and former water worker
Sources: The Guardian
