Thames Water Creditors Propose £20.5bn Rescue Plan to Avoid Nationalisation

A consortium of senior creditors, called London & Valley Water, has proposed a £20.5 billion rescue and turnaround plan for Thames Water, the UK's largest water supplier serving 16 million customers. The plan focuses on improving operational performance by reducing pollution and sewage spills, with a target to cut spills by at least 135 annually, and increasing investment in sewage and water assets by 45% over current levels, including £3.9 billion for upgrading the worst-performing sewage treatment sites. This investment would be funded by a combination of writing off several billion pounds of debt and injecting new equity and debt, aiming to restore Thames Water to investment grade status without increasing consumer bills beyond the levels already approved by regulator Ofwat. The creditors seek regulatory leniency on performance targets to enable the turnaround and avoid Thames Water entering the government's special administration regime, which would amount to temporary nationalisation. While some junior creditors oppose the plan and environmental groups call for nationalisation due to pollution concerns, the consortium emphasizes that their approach offers value for money, protects customers, and ensures the company’s viability. Ofwat is currently reviewing the proposal, with decisions expected soon on both the operational plan and financial restructuring.