Britain’s biggest water supplier, Thames Water, is in talks with officials over contingency plans including a temporary nationalization as concerns grow over its more than £13 billion ($16.5 billion) debt pile, according to people familiar with the matter.
(Bloomberg) — Britain’s biggest water supplier, Thames Water, is in talks with officials over contingency plans including a temporary nationalization as concerns grow over its more than £13 billion ($16.5 billion) debt pile, according to people familiar with the matter.
Talks are underway between water regulator Ofwat, the Department for Environment, Food and Rural Affairs and the Treasury about bringing the utility company into a so-called special administration regime, according to two of the people. One said they hoped nationalization would not be necessary.
Thames Water provides water services for 15 million people in London and the South East. Its Chief Executive Officer Sarah Bentley stepped down with immediate effect on Tuesday amid concerns over the financial stability of the firm.
The company’s junk-rated bonds due in 2026 plunged 14 pence on the pound on Wednesday to about 72 pence, the biggest drop and the lowest price since they were issued in November 2020, according to CBBT data.
The Department for Environment, Food and Rural Affairs did not respond to requests for comment. Ministers are expecting to be called to the House of Commons later Wednesday to outline the plans, according to one of the people.
Speaking to Sky News on Wednesday, children’s minister Claire Coutinho declined to comment directly on the plans.
“I certainly think there are water companies like Thames Water which are in difficult positions,” she said. “But I think our position as government is to make sure that we have the right policies in place to see consumers protected.”
A spokesperson for Thames Water did not immediately respond to a request for comment. Ofwat did not immediately respond to a request for comment.
AlixPartners has been undertaking operational improvement work on the company for a couple of months, according to people familiar with the matter.
A spokesperson for AlixPartners declined to comment.
–With assistance from Irene García Pérez, Eamon Akil Farhat, Dinesh Nair and Priscila Azevedo Rocha.
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