Thames Water creditors prepare for legal fight over possible nationalisation

Thames Water’s investors, London & Valley Water, is a consortium of 100 institutional investors that hold £17bn of the firms £12bn debt. Photograph: Toby Melville/Reuters View image in fullscreen Thames Water’s investors, London & Valley Water, is a consortium of 100 institutional investors that hold £17bn of the firms £12bn debt. Photograph: Toby Melville/Reuters Thames Water creditors prepare for legal fight over possible nationalisation Investors say they will work with Andy Burnham but hire litigation specialists amid reports the firm could enter temporary public ownership The group of investors pursuing a rescue bid for Thames Water have said they are willing to discuss greater public control, but are also preparing for a potential multi-billion pound legal battle amid reports Andy Burnham could temporarily nationalise Britain’s biggest water company. London & Valley Water (L&VW), a consortium of 100 institutional investors that hold £17bn of the water company’s £21bn debt, has said it is open to government involvement with Thames Water , but indicated that this does not include public ownership in the struggling company. Mike McTighe, the corporate troubleshooter who is leading the governance overhaul and building the new board proposed for Thames Water, said the consortium wanted to work constructively with Burnham when he takes over as prime minister. “We are keen to meet new ministers as soon as possible to discuss how we can work together in the best interests of customers, including by enhancing public control of the company’s operations,” he said. “We will work with Andy Burnham, his government and local authority leaders to rebuild confidence in Thames Water and the wider sector.” The comments by McTighe, who is likely to take over as Thames Water’s chair if the consortium is able to get its £10bn rescue deal approved by the government, follow reports that Burnham is planning to transfer the company into a special administration regime (SAR), a form of temporary public ownership, after he takes over as prime minister. Burnham said last month that there should be “greater public control” of Thames Water and told the Guardian this could mean nationalisation. The SAR proposal would transfer the costs of running the company to the taxpayer, with Thames Water’s creditors claiming the bill could come to £2bn. “If it is going to cost the taxpayer £2bn to keep the company afloat then the taxpayer needs to receive something in return; that means control, so that we can fix the company and secure the water supply for thousands of families and businesses,” a Burnham ally told The Sunday Times. L&VW, which includes fund managers such as Apollo Global Management, Elliott Management, Farallon Capital Management and Silver Point Capital, has also moved to strengthen its legal position in order to be prepared if Thames is nationalised. The consortium has hired top litigation and disputes firm Pallas Partners to work alongside Akin Gump, the law firm