Thames Water’s creditors line up new board under proposed rescue deal

Aug 24 (Reuters) – Thames Water’s senior creditors on Monday named the first group of proposed directors, including a turnaround specialist and a former civil servant, to oversee a decade-long overhaul of Britain’s struggling utility if its rescue plan is approved.

Britain’s largest water supplier, saddled with about £20 billion ($27 billion) in debt, has been fighting for survival after successive owners failed to invest adequately in its ageing infrastructure. The company has also faced public anger over sewage discharges into rivers.

The senior creditor consortium, known as London & Valley Water, in July proposed a revised rescue plan that includes a 10-year transformation programme and a possible ‘golden share’ for the government in an effort to avoid the company being taken into public ownership under Prime Minister Andy Burnham’s government.

The plan aims to invest in Thames Water’s infrastructure and address the root cause of critical issues such as pollution and leakage. The appointments hinge on the approval of the turnaround plan, water regulator Ofwat clearing each director, and a new capital structure being put in place through a court-sanctioned restructuring.

The creditors, holding £17 billion of the troubled utility’s debt, proposed installing broadband network Openreach’s chair Mike McTighe, former Yorkshire Water CEO Liz Barber, ex-CEO of Openreach Clive Selley and former Permanent Secretary at the Department for Transport, Bernadette Kelly, to Thames Water’s board.

“It will take time to fix Thames Water, but we are committed to rebuilding trust with the customers and public Thames Water serves,” said McTighe, who would lead the governance overhaul and build the new Thames Water board. 

Collectively, the group of directors has experience in turning around businesses and running regulated utilities in Britain.

“Thames Water continues to work constructively to reach an agreement that supports its long-term financial stability,” a spokesperson for the utility said in an emailed statement to Reuters.

($1 = £0.7331)

(Reporting by Prerna Bedi and Yadarisa Shabong in Bengaluru; Editing by Mrigank Dhaniwala, Sherry Jacob-Phillips and Louise Heavens)