Thames Water’s lenders have revealed they are looking at offering a “golden share” to the Government as part of a revised rescue deal to stave off nationalisation of the stricken supplier.
The consortium of lenders bidding for the UK’s biggest water firm, which has around 16 million customers across London and the South East, said it remains in talks with regulators over a possible deal, with “material improvements” being considered on its previous £10 billion proposal to appease government concerns.
It comes amid reports Andy Burnham could temporarily nationalise the debt-laden company, having already signalled he wants to bring in a 10-year plan to renationalise the water industry, saying reform is needed to put the public interest first.
London & Valley Water said it “recognises that the new Government, led by Prime Minister Andy Burnham, would like to see water companies create greater local public control and involvement to strengthen accountability for protecting investment and delivering improvements”.
It added: “The consortium has evaluated potential new local public control supervisory structures for Thames Water which can be beneficial to customers and intends to discuss this with the new Secretary of State, alongside additional commitments that could be implemented through a ‘golden share’.”
The creditors said the new supervisory structure would give “enhanced local representation for local authorities and regional leaders”.
The Government holds golden shares in a number of privatised companies of national and strategic importance, such as Royal Mail following its takeover by EP Group last year.
These special rights shares give the Secretary of State the power to veto major asset sales, foreign takeovers or changes to the company’s institution.
A rescue plan by creditors is seen as the final realistic option to avoid Thames Water being placed into a special administration regime after a previous rescue deal with US private equity giant KKR collapsed in May last year.
But creditors have already been sent back to the drawing board after former environment secretary Emma Reynolds last month warned she did not believe their £10 billion plan for Thames Water goes far enough to protect customers or the environment.
Former farmer minister Dame Angela Eagle was last night appointed as the new Environment Secretary by Mr Burnham.
A spokesman for London & Valley Water said: “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.
“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.
“Under our plan, customers will have strong protections, regulators and government will have enhanced oversight, and there will be greater controls to ensure Thames Water delivers the record investment needed to improve environmental and operational performance.”
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