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Thames Water lenders offer a government veto stake to avoid nationalisation

Lenders are preparing a legal challenge if the new Andy Burnham-led government takes Thames Water into public hands, and say full nationalisation could trigger demands for repayment of outstanding debts.

Reported · Written up by our desk · Industry & Deals

Thames Water's main lenders are offering the government a “golden share” and greater involvement for local authorities to try to prevent the troubled water supplier from being nationalised, the BBC reports.

According to the outlet, the government would be given veto powers over major decisions such as mergers, while local authorities would gain more influence, a structure similar to the arrangement between United Utilities and Greater Manchester when Andy Burnham was mayor.

The BBC says the lenders are also preparing for a possible legal challenge in case the new Burnham government takes the firm into public hands, after a previous rescue proposal was rejected.

The lenders are described as warning that if full nationalisation happens, they would pursue payment in full of Thames Water’s outstanding debts, potentially leaving the government with a multi-billion-pound bill, while they point to a revised plan that they say includes hundreds of millions in additional cash.

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