Thames Water Investors Outline Board Restructuring as Part of Rescue Effort

A coalition of creditors seeking to rescue Thames Water has faced criticism for proposing board changes that resemble merely rearranging deckchairs on a sinking ship.

To avert potential temporary nationalisation by Mayor Andy Burnham, the lenders announced plans to appoint Liz Barber, formerly chief executive of Yorkshire Water, and Clive Selley, former chief executive of Openreach, as directors should they assume formal control of the utility.

London & Valley Water (L&VW), a consortium of 100 institutional investors holding £17 billion of the company’s £21 billion debt, has also nominated Dame Bernadette Kelly, former permanent secretary of the Department for Transport, for board appointment.

Mike McTighe, the corporate turnaround specialist overseeing Thames’s restructuring, would assume the chairmanship from Sir Adrian Montague pending approval of the £10 billion rescue package. McTighe currently chairs Openreach.

He remarked, “The challenge facing Thames Water is substantial. Should the recapitalisation plan be approved, the new board will concentrate fully on transforming the business and fostering a customer‑centric culture that serves the communities reliant on Thames Water.”

The proposed appointments aim to reassure the government that any commercial agreement will be accompanied by a leadership reshuffle, as Burnham’s team evaluates the prospect of returning the company to public ownership.

We Own It, a public‑ownership advocacy group, criticised the announcement. Cat Hobbs, its director, said, “This is absurd. It represents a cosy stitch‑up that neglects the interests of the 16 million people who rely on Thames Water and amounts to little more than shuffling deckchairs on a sinking ship.”

Burnham has advocated for “greater public control” of Thames Water and, in a previous Guardian interview, suggested nationalisation could occur via a special administration regime (SAR), a temporary form of public ownership.

More recently, the Prime Minister expressed anger over recent approvals for bill increases by companies such as Thames Water.

He warned that companies must not treat bill payers like a “blank cheque”, emphasizing his growing concerns about the need for increased government oversight of the utilities sector.

Under the SAR proposal, operational costs would be borne by taxpayers, with creditors estimating the financial burden could reach £2 billion.

L&VW, which counts Apollo Global Management, Elliott Management, Farallon Capital Management and Silver Point Capital among its members, has also reinforced its legal stance to prepare for a potential nationalisation.

The consortium has engaged top litigation firm Pallas Partners to work alongside Akin Gump, which is advising the consortium on the restructuring terms.

The lenders have been pursuing ownership to exit administration, following a failed attempt last year to sell the utility to US investment firm KKR.

However, the creditors’ plans were cast into doubt in June when former environment secretary Emma Reynolds wrote to regulator Ofwat, raising concerns about the deal’s terms.

McTighe stated that the proposed ten‑year plan aims to “fix the foundations” of Thames Water. He added, “It will take time to rebuild the company, but we remain committed to restoring trust with the customers and the public we serve.”

Russ Mould, investment director at AJ Bell, commented on the proposed appointments: “We hope these credible names will inspire confidence in the company’s future under private ownership.”

He warned that such an outcome would impose significant losses on creditors, who are seeking formal ownership of the business after already assuming de facto control, and who plan to list it on the stock market as early as 2030.

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