Ofwat expected to hold crucial Thames Water talks in 'coming days'

(Sharecast News) - Ofwat is expected to hold discussions this week about a potential rescue deal for debt-laden Thames Water as speculation mounts about possible nationalisation of the utility company. According to the blog of Mark Kleinman, city editor at Sky News, Ofwat's board will meet "in the coming days".

Sky sources cited the discussions as "an important staging post", though are not expected to produce a final decision on the' proposal by the water provider's creditors, the London & Valley Water consortium, to pour £3.35bn of new ​equity and up to £6.55bn in fresh debt into the firm as part of an effort to lock in a rescue deal.

The rumoured talks come amid heightened concerns that Thames Water will be put in a Special Administration Regime (SAR), a type of insolvency procedure for failing companies that provide essential public services.

Meanwhile, with the probability of a leadership contest within the Labour party rising, lead challenger Andy Burnham has reportedly back the idea of nationalising the water provider.

"We continue to engage with London & Valley Water and are reviewing their plans carefully to assess whether they deliver a turnaround in the company's operational performance and strengthen its financial resilience to the benefit of customers and the environment," an Ofwate spokesperson said, quoted by Sky News.