Widespread news reports in the press and online media during the course of last week, over the weekend and today are suggesting that if Andy Burnham, who will shortly be appointed as the UK’s new prime minister, moves to nationalise Thames Water, the creditors will launch a legal challenge.
According to a report in the Sunday Times entitled “Burnham will take over failing Thames Water”, a plan to put the utility into a Special Administration Regime (SAR) is currently under consideration. The newspaper says the emergency SAR would risk leaving the taxpayer with a £2 billion bill.
“Thames Water is expected to be put into special administration in one of his first acts as prime minister, as Burnham promises greater public control of water and energy companies”, the article says.
The same story is also reported in numerous other publications, alongside separate articles saying that some 100 institutional investors that hold £17 billion of the company’s £21 billion debt who make up the London & Valley Water consortium are preparing to mount a legal challenge in the event of a SAR for Thames Water.
The consortium, which is currently being advised by law firm Akin Gump on the terms of their restructuring proposals, has also appointed litigation and disputes firm Pallas Partners to work alongside them, according to a report in yesterday’s Guardian newspaper.
Leading news organisations reporting along similar lines include the FT, Reuters, Sky News, the BBC, the Independent and City AM.
Last week Thames Water reported that it has returned to profit and secured sufficient funding through to Q4 2026, according to its Annual Results for the year to 31 March 2026.
On Thrsday 17 July the water company also separately launched the process to gain access to further funding of c£677 million
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