A consortium of institutional investors holding £17bn of Thames Water’s £21bn debt has announced plans to restructure the company’s board if allowed to formalize their control. The proposed leadership includes Liz Barber, former chief executive of Yorkshire Water; Clive Selley, former chief executive of Openreach; and Dame Bernadette Kelly, former permanent secretary of the Department for Transport. Mike McTighe, currently chair of Openreach, would serve as the new chair, replacing Sir Adrian Montague.
The creditor group, known as London & Valley Water and comprising approximately 100 institutional investors including Apollo Global Management and Elliott Management, is pursuing a £10bn recapitalization plan. The proposed board changes are intended to demonstrate to the government that a commercially-led solution would include meaningful leadership changes, as officials evaluate the potential for bringing Thames Water into public ownership.
The announcement has drawn criticism from public ownership advocates. The campaign group We Own It characterized the proposal as a superficial effort, arguing it fails to address the interests of the 16 million people reliant on Thames Water’s services. Government officials, including Andy Burnham, have indicated that greater public control may be necessary, potentially through a special administration regime that would temporarily nationalize the company and transfer operational costs to taxpayers, estimated at £2bn.
The creditors have reinforced their legal position by engaging litigation specialists in preparation for potential nationalization scenarios. Their efforts follow a failed attempt to sell Thames Water to US investment firm KKR last year. The consortium’s restructuring proposals faced complications when government officials raised concerns about deal terms earlier this year. Leadership has committed to a 10-year transformation plan and indicated intentions to return the company to stock market listing by 2030 if the private ownership scenario proceeds.
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