Thames Water's lenders have presented a proposal to the UK government that includes a 'golden share' in a bid to avert nationalization of the beleaguered water supplier. The plan, put forth by the London & Valley Water consortium of creditors, aims to address the government's concerns about accountability and public control over the company, which serves 16 million customers across London and the South East.
The consortium, which includes investment firms Silver Point Capital and Elliott Management, stated that it 'recognises that the new Government would like to see water companies create greater local public control and involvement to strengthen accountability for protecting investment and delivering improvements.' Granting a 'golden share' would provide taxpayers with special rights, potentially giving oversight to figures like London Mayor Sadiq Khan, whose constituents are affected by the company's operations.
This offer comes as Thames Water faces significant financial pressure, burdened by approximately £20 billion in debt. The company recently imposed a hosepipe ban on 10 million customers, highlighting operational challenges.
A golden share is a special type of share held by the government in privatized companies of national importance. It typically grants the Secretary of State the power to veto significant decisions such as major asset sales, foreign takeovers, or amendments to the company's constitution. The government currently holds such shares in other strategic companies, including Royal Mail following its acquisition by EP Group.
The London & Valley Water consortium indicated that it is continuing discussions with regulators regarding the proposed deal. A spokesperson for the consortium asserted that their plan is the 'fastest and most reliable route' to resolving Thames Water's issues, promising strong customer protections, enhanced oversight for regulators and government, and increased controls to ensure necessary investments for improving environmental and operational performance. The company emphasized that Thames Water is of 'national importance' and expressed a desire to collaborate with the government on a long-term solution.