Creditors Propose Thames Water Board Overhaul Amid Rescue Bid
Mike McTighe Tapped for Chair as Consortium Seeks Government Backing to Avert Nationalisation
Image: Eddie Pollard / AI
Carla Rooney
A consortium of Thames Water creditors has proposed a significant board overhaul as part of a £10bn rescue bid.
Mike McTighe, current chair of Openreach, is proposed as the new chair of Thames Water, contingent on the approval of a rescue deal.
London & Valley Water (L&VW), a consortium holding £17bn of Thames Water's £21bn debt, has also lined up Dame Bernadette Kelly for a directorship.
This consortium, comprising 100 institutional investors, includes major UK and US investment companies such as Elliott Management, Aberdeen Investments, and Apollo Global Management.
The creditors' proposed appointments aim to reassure the government that any commercial deal will bring a decisive leadership overhaul.
These proposed board members intend to reassure the Government regarding governance and leadership.
McTighe stated a commitment to rebuilding trust with customers and the public Thames Water serves, acknowledging that fixing the company will demand significant time.
He further pledged that if the recapitalisation plan is accepted, the new board will apply full dedication to transforming the business and building a culture that prioritizes customers and local communities.
McTighe outlined a relentless focus on protecting public health and safety, improving the local environment, ensuring fair water pricing, protecting vulnerable customers, and investing in clean, reliable water supplies for future generations.
The consortium hopes to secure agreement for its deal from regulator Ofwat and the Government this autumn.
This move comes as Andy Burnham examines the possibility of taking Thames Water, which serves approximately 16 million customers in London and the South East, back into public ownership.
This could occur potentially via a special administration regime (SAR).
The SAR proposal would transfer the costs of running the company to the taxpayer, with Thames Water’s creditors claiming the bill could reach £2bn.
The consortium seeks to secure Government backing for the deal to avoid nationalization, having already assumed de facto control of the business.
The Government has previously stated it would prefer a “market solution” for Thames Water.
A rescue plan by creditors is seen as the final realistic option to avoid Thames Water being placed into a special administration regime.
The creditors have been trying to take ownership and bring Thames out of administration following a failed attempt to sell the utility to the US investment group KKR last year.
Creditors are seeking to formally take ownership of the business, with plans to list it on the stock market as early as 2030, according to Russ Mould.