Castle Water has re-entered the race to reshape the future of Thames Water with a reinforced pitch that centres on a significant financial uplift and the promise of major job creation. Its latest plan seeks to put forward a different direction at a time when the utility is still attempting to secure essential funding to avoid the prospect of nationalisation. As part of its offer, Castle Water says it can provide an additional £1bn in fresh capital above what is currently on the table, a move it believes will form the backbone of a faster and more sustainable recovery. Central to the proposal is the focus key phrase Castle Water takeover plan for Thames Water, which Castle Water presents as a way to stabilise the utility while boosting long term resilience.
Thames Water remains deeply engaged in talks with its main creditors and regulators. These discussions are being led by the consortium London and Valley Water, which has its own programme designed to inject capital and write off a substantial portion of debt. The consortium has put forward plans to write off about £4bn, representing 25 per cent of the debt it holds, while adding £150m in new equity and a further £1bn in investment in addition to a proposal submitted to Ofwat in May. Their approach also includes an appeal for more flexible performance targets linked to pollution incidents and water leaks, which would accompany the new investment.
Into this complex landscape, the Castle Water takeover plan for Thames Water offers an alternative vision. Castle Water had previously been one of the parties showing interest earlier in the year, although its first bid lost out to proposals from KKR, which later withdrew from the process. Castle Water says that this renewed offer is supported by the Pears family property group and would lead to the creation of up to 2,000 new jobs. These roles would largely be in engineering, scientific work and operational functions and would form part of what the company describes as a 25 per cent increase in overall spending. The company also commits to repairing and expanding wastewater treatment capacity to cut pollution. Castle Water is co owned by Conservative Party treasurer Graham Edwards and identifies itself as the largest independent water retailer in the country.
John Reynolds, Castle Water’s chief executive, told The Times that he is “confident” this turnaround strategy can address pollution problems within Thames Water. He also argued that talks between Thames and its investors had slowed due to the nature of the consortium’s proposals. A spokesman for the creditors rejected this, saying it was “simply not true that discussions have stalled” and that the need for £5bn of urgent funding remains pressing. Talks are expected to accelerate once the autumn Budget on 26 November has passed, with the consortium aiming to strike a rescue agreement before Christmas.
Thames Water itself has stated that discussions with creditors, Ofwat and other regulators are ongoing. It says it is working towards a recapitalisation that benefits customers and the environment as soon as possible. Whether the final outcome results from the consortium’s bid or the Castle Water takeover plan for Thames Water, the urgency of securing a stable long term solution is becoming increasingly clear.
