Thames Water’s senior creditors mull deal sweetener: Sky

Thames Water’s senior creditors mull deal sweetener: Sky

Thames Water’s senior creditors are reportedly offering an additional £1 billion-plus sweetener to persuade Ofwat and the UK government to pursue a rescue deal, according to Sky News [1]. This move aims to head off the potential nationalisation of Britain’s largest water utility. The creditor group, which includes funds such as Elliott Management and Silver Point Capital, is seeking to avoid seeing their investments effectively wiped out in a special administration regime (SAR).

The creditors have already offered £3 billion of new equity and roughly £2 billion of debt financing, representing a roughly 20% haircut on their existing exposure to Thames Water. The new proposal includes hundreds of millions of pounds of new equity and a substantial additional debt write-off, totaling approximately £1.25 billion [1].

The creditor group is expected to set out further operational plans for the company on Tuesday, aiming to address concerns about their lack of experience in running the UK’s largest water company [1]. The company serves about 16 million customers and covers a quarter of the UK population [1].

The government has indicated a preference for a market-based solution to the crisis at Thames Water. The environment secretary, Steve Reed, has authorised FTI Consulting to advise on contingency planning for a SAR [1]. The chancellor, Rachel Reeves, has also reaffirmed the government's desire for a market-based solution [1].

Thames Water’s financial struggles have been ongoing, with the company facing significant debt and operational challenges. The creditors’ latest proposal is part of a comprehensive plan to be submitted to Ofwat, with the numbers still subject to finalisation [1].

References:
[1] https://ca.news.yahoo.com/thames-water-creditors-offer-1bn-181200241.html
[2] https://www.reuters.com/world/uk/thames-water-creditors-offer-1-billion-pound-sweetener-rescue-deal-sky-news-2025-09-01/