World News
UK ministers prepared to amend laws to reform water sector and take over Thames Water
Environment Secretary Angela Eagle says legislation could be updated to resolve challenges in placing the indebted utility into special administration.
The short version
- UK Environment Secretary Angela Eagle stated that the government is prepared to change insolvency laws to take Thames Water into public ownership if necessary.
- Thames Water owes approximately £20 billion and is controlled by major US hedge funds seeking a £10 billion debt restructuring to avoid state takeover.
- Although critics urge placing the company into special administration, Eagle noted the firm is not yet technically insolvent, complicating state intervention under current statutes.
- Ministers plan to use an upcoming water bill as a legislative mechanism to enact necessary regulatory and ownership reforms.
Key facts
- Environment Secretary Angela Eagle indicated that current insolvency statutes are ill-equipped for Thames Water's corporate structure and that ministers are ready to pursue public ownership.[The Guardian]
- Thames Water carries a £20 billion debt pile and was issued a record £122.7 million fine for sewage discharges and unlawful dividend payouts.[The Guardian]
- Major US hedge funds, including Apollo Global Management and Elliott Management, own substantial stakes in Thames Water and are seeking regulatory approval for a £10 billion debt restructuring.[The Guardian]
- Eagle stated that Thames Water is not technically insolvent, which complicates triggering special administration under existing Water Act provisions.[The Guardian]
- The government plans to introduce an upcoming water bill to provide the legislative powers required to restructure or take control of the utility.[The Guardian]
What remains uncertain
- Whether the government will enact legal changes to force special administration or if regulators will approve the £10 billion creditor-backed restructuring deal remains unresolved.[The Guardian]
- Legal experts and government officials disagree on whether current legislation already permits ministers to revoke Thames Water's operating licence without statutory amendments.[The Guardian]
Sources
- We’re prepared to change the law to reform water industry, says Angela EagleThe Guardian - World