(qlmbusinessnews.com . Wed 19th Nov, 2025) London, UK —
Thames Water Financial Woes: Alternative Bidders Claim Unfair Exclusion by Creditors
A rescue plan put forward by lenders for Thames Water, the UK’s largest water utility, has faced criticism from other companies interested in making bids, claiming they have been excluded from discussions about the company's future.
Thames Water, serving 16 million customers, is on the verge of financial collapse, relying on emergency support from its creditors, who are collectively owed in excess of £13bn.
CKI Holdings, based in Hong Kong, along with UK's Castle Water, have voiced their concerns, arguing their bids have been sidelined by the current creditors' consortium, who are endeavouring to minimise their financial losses.
Without intervention, Thames Water is expected to plunge into a government-led administration by the early months of next year.
The utility, drowning in nearly £20bn of debt and surviving on an emergency cash injection from its current lenders, is at a critical juncture.
The creditors, now operating under the banner of London and Valley Water, are in exclusive negotiations with government bodies and regulatory authorities on a bailout plan.
This proposal includes writing off 25% of the existing debts and infusing over £4bn in new funds but necessitates a prolonged period of regulatory leniency regarding fines connected to pollution issues. A failure of Thames Water could lead to a more substantial debt write-off if it enters administration.
Other potential suitors have expressed frustration over the dominating control exercised by the current creditor group, alleging that it has blocked alternative and potentially superior bids.
CKI Holdings, an operator of Northumbrian Water and UK Power Networks, is highlighted in a Barclays analysis, indicating that customer bills might surge by nearly 20% over five years under the lenders' proposed rescue plan.
According to Barclays, this plan would transfer future operational and financial risks onto consumers, potentially adding £116 to their bills by 2030, while seeking further regulatory concessions regarding environmental penalties.
Despite criticisms, the lender consortium has dismissed the Barclays research note, labelled by some as biased towards attracting investment for CKI, maintaining that they extended sufficient opportunity for CKI to present a viable offer.
Even if CKI were to be reconsidered for a bid, questions of national security concerning the sale of crucial infrastructure to a firm with Chinese connections have been raised, echoing the concerns of Sir Simon Gass, former leader of the Joint Intelligence Committee.
Castle Water, on the other hand, has proposed an additional £1bn investment compared to the London and Valley Water's plan, emphasising a substantial overhaul in service and addressing pollution directly.
However, the credibility of Castle Water's proposal remains in question, not yet constituting a formal bid.
Critics, including Prof Dieter Helm, an economist and infrastructure expert, have accused the current bondholders of prioritising their financial recovery over the company's and its customers' long-term welfare.
Prof Helm advocates for a government-led Special Administration Regime (SAR) for Thames Water, which could lead to a more significant debt write-off than the 25% proposed by the current lenders but would pose a financial challenge for the government.
The bondholder consortium remains hopeful that ongoing discussions with Ofwat and the Treasury will lead to a preliminary agreement by December.
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