Thames Water Creditors Propose Golden Share and Dividend Ban in Revised Rescue Plan

London & Valley Water, a consortium of 100 institutional investors holding £17bn of Thames Water’s £21bn debt, submitted a revised rescue package on Tuesday that includes a government golden share. The proposal would give the government a veto over major decisions and hostile takeovers.

The £10bn plan also commits the investors to forgo dividends for 10 years or until the company lists publicly. It expands Thames Water’s social tariff to reduce bills for low-income households. L&VW stated the changes would enhance oversight and shared accountability on infrastructure projects.

Prime Minister Andy Burnham has indicated plans to place Thames Water under a special administration regime. Burnham said last month that greater public control could include nationalisation. Creditors estimate the regime would shift up to £2bn in operating costs to taxpayers.

Thames Water serves 16 million customers in London and the Thames Valley. The utility has struggled with interest payments accumulated since privatisation. Creditors attempted to sell the company to KKR last year but the transaction did not proceed.

Last month, then-environment secretary Emma Reynolds wrote to Ofwat raising concerns about the creditors’ terms. Angela Eagle replaced Reynolds in that post on Monday during Burnham’s cabinet reshuffle.