Thames Water lenders pitch new governance plan as nationalisation threat looms

(Sharecast News) - Thames Water's lenders have offered to give the government a so-called "golden share" in the utility as part of a revised £10bn rescue package aimed at avoiding nationalisation by new prime minister Andy Burnham. The proposal comes from the London & Valley Water (L&VW) consortium, which represents around 100 of Thames Water's institutional investors and currently holds £17bn of its £21bn debt pile.

L&VW said it is in active discussions with regulators and wants to work with new ministers on a long-term turnaround plan.

Under the proposal, ministers would receive enhanced oversight through a golden share, alongside a new public interest supervisory structure with greater local authority representation.

L&VW says the plan would strengthen accountability while keeping the company in private ownership.

The consortium also pledges that all profits would be reinvested until Thames Water returns to the public markets, with no dividends for at least 10 years. It says investors would fund the turnaround without taxpayer support, customer bills would not rise beyond Ofwat's existing settlement, and no environmental leniency or immunity from enforcement has been requested.

"Thames Water is a company of national importance, and we look forward to working with the new Government to secure a long-term solution which delivers greater public control and the best outcome for customers," said a L&VW spokesperson in a statement on Tuesday.

"We continue to believe that the L&VW plan is by far the fastest and most reliable route to solving Thames Water's complex problems and improving outcomes for customers and the environment, and achieves this without any Government funding or cost to taxpayers."