A group of Thames Water’s senior creditors, including PE firms Silver Point Capital and Apollo Global Management, have submitted a revised operational plan to UK regulator Ofwat as part of efforts to avert the collapse of the UK’s largest water utility, according to a report by Bloomberg.
The creditor group, operating under the name London & Valley Water, is seeking approval for a turnaround strategy that would commit £20.5bn in operational spending and investment over the next five years, in line with Ofwat’s expenditure framework. Measures include large-scale mains replacement, upgraded infrastructure, and tighter pollution controls.
Alongside operational reforms, the group is finalising a financial restructuring package expected to involve several billion pounds of debt write-offs and fresh capital injections in both equity and debt. Negotiations remain focused on the scale of creditor equity commitments, debt haircuts, and regulatory agreement on key operational and financial metrics.
The proposed deal has been framed by backers as a “market solution”, designed to restore Thames Water’s financial resilience without resorting to taxpayer-funded bailouts. However, the plan must also navigate political sensitivities, with Environment Minister Steve Reed insisting that Thames Water face the same penalties on sewage fines as other utilities.
The submission marks the second iteration of the rescue blueprint, following feedback from Ofwat earlier this year. Failure to secure approval could see Thames Water placed into a special administration regime, a state-supervised process akin to insolvency. The UK government has already appointed FTI Consulting to prepare contingency plans.
