Thames Water, Britain’s largest water supplier serving 16 million customers, faces potential nationalisation due to its financial struggles, regulatory fines, and pollution penalties.

Discussions with Ofwat, the regulator, have been ongoing since May, aiming to secure approval for the plan, which is crucial for the company’s recovery and avoiding government intervention.

Ofwat is currently reviewing the proposal, with hopes for approval in the autumn; delays could hinder Thames Water’s efforts to stabilize and improve its operations.

The consortium emphasizes that their plan would prevent the need for taxpayer-funded intervention and help the company recover without resorting to a special administration regime.

A consortium of Thames Water lenders has proposed a comprehensive rescue plan to prevent the company's collapse, involving an extra £1 billion in investment and the write-off of over a quarter of its nearly £20 billion debt.

The plan includes a commitment for Thames Water to eventually float on the stock market, but not before March 31, 2030, allowing the company to focus on operational turnaround without a sale in the near term.

Potential new leadership includes infrastructure expert Mike McTighe as chairman, who has highlighted the need for extensive operational improvements, pollution reduction, and billions in new investment.

McTighe, if appointed, would lead a board with five new directors, focusing on rebuilding public trust and transforming Thames Water’s environmental and operational performance.

Previous rescue efforts, including a deal with KKR, collapsed earlier this year, raising fears of nationalisation, but the UK government prefers a market-based solution and emphasizes job security and environmental commitments.

Creditors are seeking regulatory approval to renegotiate pollution and water leak targets, halt dividend payments during the turnaround, and use additional investment to improve environmental performance.

The bidders stress that their plan aims to avoid government intervention, ensuring stability and protecting public and investor interests.

The deal is designed to provide immediate confidence to stakeholders, prevent the costs associated with special administration, and avoid the financial burden falling on UK taxpayers.