Treasury seeks clarification on Thames Water renationalisation

It comes ahead of a crucial court decision on Tuesday, with a judge deciding whether to approve a £3bn emergency loan from creditors. If rejected, Thames Water is widely expected to enter a special administration regime (SAR).

According to the Financial Times, the Treasury is seeking clarity on what impact this would have ahead of the Spring Statement next month – with people familiar with the situation suggesting the government had been loath to clarify potential impacts as it’s opposed to renationalisation.

It’s concerned an SAR would have a domino effect on other indebted water companies, and impact the government’s balance sheet.

The proposed £3bn loan for Thames Water is from its class A creditors and carries a 9.75% interest rate – as well as fees. It’s opposed by a different group of creditors, who stand to lose nearly all their money under the deal and have put forward their own slightly cheaper loan.

Outside this, the business has also said it plans to appeal to the Competition and Markets Authority (CMA) for higher price increases for customers, with half of the creditors’ £3bn loan being conditional on a CMA challenge.