Burnham has previously expressed support for nationalisation
Investors in Thames Water have expressed their willingness to explore increased “public control” of the utility company following reports that Andy Burnham could temporarily nationalise the struggling company.
Turnaround expert Mike McTighe, who is working with Thames Water’s principal creditor group, revealed that UK and international investors are prepared to engage with the incoming Government to “rebuild confidence” in the debt-burdened organisation.
Mr McTighe commented: “We are keen to meet new ministers as soon as possible to discuss how we can work together in the best interests of customers, including by enhancing public control of the company’s operations. We remain ready and willing to recapitalise Thames Water, return it to investment grade, and begin the long process of turning it around. We urgently need Government engagement to begin that process.”
Mr Burnham, who starts his new role of prime minister today (Monday, July 20), has previously expressed his support for bringing in greater public control of essential utilities, including water services.
Media reports have indicated he is considering placing the company into a special administration regime (SAR) as a temporary nationalisation measure, while the firm grapples with a £20 billion debt burden.
The company’s annual report published last week highlighted a “material uncertainty” over its ability to secure enough liquidity to navigate towards a viable rescue strategy. A rescue proposal from creditors is viewed as the last viable alternative to prevent the company entering a special administration regime (SAR) following the breakdown of a previous bailout agreement with American private equity firm KKR in May last year.
However, creditors have been forced to revisit their proposals after Environment Secretary Emma Reynolds indicated last month that she believed their £10 billion strategy for Thames Water falls short of adequately safeguarding customers or environmental standards.
Thames Water has also cautioned that an SAR would require taxpayers to finance the operation to the extent of £2 billion by the end of next year, the Sunday Times reported.
The firm’s creditors are reportedly prepared to negotiate additional compromises to their proposed rescue package to prevent burdening taxpayers with the expense of maintaining operations and upgrading its deteriorating infrastructure.
Mr McTighe, who is spearheading initiatives to reform Thames Water’s governance structure, commented: “It will take time to fix a complex business like Thames Water, but we are committed to rebuilding trust with the customers and public we serve.”
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