UK offers to Thames Water Managers.

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The UK government has approached advisers about taking on the role of a special administrator, a sign that ministers have recently returned to reform. Thames water.

Consultancies including Teneo, Interpath and EY are among the potential candidates to run the so-called special management system, according to people familiar with the process. SAR is a temporary measure designed to keep services running and suppliers and employees paid in the event of a corporate failure.

“We are ready now, if we have to we can do one (SAR) today,” an official said. A managed, self-directed solution is found.

Thames Water is struggling under a £19bn debt pile and has warned it will run out of money in March unless the High Court signs off. Controversial £3bn loan At the hearing in early February.

Another government official said there had been “informal engagement” with certain advisers on the special management role, but no formal interview process.

Steve Reid, the environment secretary, said in October that he had “removed nationalism”.

Officials insist that taking the company to the SAR is a major government intervention but will not technically be nationalized.

But subjecting Thames waters to special management may be inevitable. The £3bn loan is controversial because it carries an interest rate of 9.75 per cent as well as fees and incentives for the existing Thames Water Authority.

The deal is being opposed by a separate group of junior lenders, Thames Water – which offered a cheaper deal – and environmental campaigners. The company will be better In special management.

The loan buys the company time to raise at least £3bn of equity in a parallel process. Companies including Castle Water, Covalis and CKI Infrastructure are among the investment groups. Sorting To submit potential bids for the facility.

Bidders and creditors are waiting to see if the company will appeal last month’s decision by regulator Ofwat to the Competition and Markets Authority. Water companies can raise customer bills In the next five years. Thames Water has not yet decided whether to appeal Ofwat’s decision to the CMA, people familiar with the matter said.

Ofwat said. Thames allowed. To raise bills by 35 per cent – far less than the 59 per cent rise it wants – taking average bills from £436 now to £588 between now and 2030.

The Department for Environment, Food and Rural Affairs, Thames Water and Ofwat did not respond to requests for comment.

EY, Teneo and Interpath declined to comment.

In an update to the market on Wednesday, the company’s chief restructuring officer, Julian Getting, said: “Our plan will provide customers and stakeholders with up to £3bn of new funding and a total of £3.5bn of debt maturity extensions. Over the next two years and funding releases, we can therefore continue to invest the billions of pounds needed to improve network resilience.

“We believe it is the only practical solution to enable the equity investment needed to provide stability and certainty in the long term and not harm customer accounts.”

The selection of a government administrator can be complicated by conflicts of interest. Teneo is already a consultant to Thames Water and has secured £5mn from August 2023. He also earned at least £60mn by managing the special administration. A failed power supply bulbAccording to the National Audit Office.

He also wrote a report to the High Court in support of the senior lenders’ £3bn loan, while Interpath wrote a separate report on behalf of the junior lenders.

Sir Dieter Helm, professor of economic policy at Oxford University, argued that the SAR would allow Thames Water to focus on restructuring and reforms rather than negotiating a deal with creditors.