Creditors of Thames Water have put forward an enhanced proposal that includes a “golden share” for the government, in an attempt to head off state control under new Prime Minister Andy Burnham.
The lender group, which includes Silver Point Capital and Elliott Management, have said it remains in active talks with regulators and is proposing new supervisory arrangements to strengthen public oversight of the company. These would give local authorities and regional leaders a seat at the table, alongside a golden share granting ministers greater influence over major decisions, a mechanism comparable to the one the government holds in Royal Mail.
The offer follows Thames Water’s annual results for 2025/26, published earlier this month, which showed record capital investment of £2.68 billion, up 20% on the previous year, as the company works through what it describes as the biggest upgrade of its infrastructure in 150 years. Pollution incidents fell 18%, and underlying profit after tax rose to £204 million. Even so, net cash outflow before debt funding widened to £1.13 billion, and net debt climbed to £18.5 billion, a reminder of the wider financial pressures still surrounding the recapitalisation process.
Burnham’s arrival in Downing Street has added uncertainty to that process. Unlike his predecessor Sir Keir Starmer, who favoured a private sector resolution, Burnham has argued that public ownership was “what should be done.” A government decision on whether to place Thames Water under temporary state administration is expected within weeks, a move creditors have signalled they would contest while still pursuing their bid.
The lenders’ earlier offer included £3.35 billion in new equity and £3.25 billion in additional debt. The creditor group, which controls about £17 billion of Thames Water’s outstanding debt, says it would reinvest all profits and keep bills within limits already approved by Ofwat, while eyeing a possible stock market listing as early as 2030.
