---
title: "Thames Water Lenders Prepare Legal Challenge Over Possible Nationalisation"
publisher: "Share Talk"
author: "sharetalk"
published: "2026-07-18T15:58:20+00:00"
modified: "2026-07-18T15:58:20+00:00"
date: 2026-07-18
canonical: "https://www.share-talk.com/thames-water-lenders-prepare-legal-challenge-over-possible-nationalisation/"
category: "B2B"
categories: ["B2B", "Business & Support Services", "Manufacturing & Industrial", "Technology", "Technology, Media & Telecoms"]
tags: ["Alastair Cochran", "Allied Irish Bank", "CEO", "City of London", "Environment Select Committee", "Insolvency", "Kemble Water Finance", "London", "London & Valley Water consortium", "Macquarie Group", "Ofwat", "Prime Minister Andy Burnham", "Sarah Bentley", "Slaughter & May", "Southern Water", "Thames Water", "utility operation", "water"]
image: "https://i0.wp.com/www.share-talk.com/wp-content/uploads/2026/07/thames-water-18-july-26.jpg?fit=1200%2C630&quality=89&ssl=1"
format: "news"
language: "en-GB"
---

# Thames Water Lenders Prepare Legal Challenge Over Possible Nationalisation

**Published:** July 18, 2026
**Author:** sharetalk
**Categories:** B2B, Business & Support Services, Manufacturing & Industrial, Technology, Technology, Media & Telecoms
**Tags:** Alastair Cochran, Allied Irish Bank, CEO, City of London, Environment Select Committee, Insolvency, Kemble Water Finance, London, London & Valley Water consortium, Macquarie Group, Ofwat, Prime Minister Andy Burnham, Sarah Bentley, Slaughter & May, Southern Water, Thames Water, utility operation, water
**Featured image:** ![](https://i0.wp.com/www.share-talk.com/wp-content/uploads/2026/07/thames-water-18-july-26.jpg?fit=1200%2C630&quality=89&ssl=1)

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A consortium of Thames Water lenders is reportedly preparing for a potential legal fight with the incoming government if Prime Minister Andy Burnham moves to force the company into public ownership.

According to Sky News, the London & Valley Water consortium has engaged litigation firm Pallas Partners to prepare a possible challenge if its rescue proposal for Thames Water is rejected.

Pallas is understood to be working alongside Akin Gump, which is advising the consortium on its restructuring proposals.

London & Valley Water is made up of funds including Apollo Global Management, Elliott Management, Farallon Capital Management and Silver Point Capital.

Together, the group holds around £17 billion of Thames Water’s £21 billion debt pile.

The consortium has been in talks over a proposed £10 billion rescue deal designed to take control of Thames Water and avoid the company being placed into a special administration regime.

Special administration would amount to temporary public ownership and could trigger a prolonged legal battle if creditors believe their restructuring plan has been unfairly rejected.

The latest proposal submitted to Ofwat reportedly includes £3.35 billion of new equity, £6.25 billion of new debt and a £9.6 billion write-off of existing debt.

However, the incoming Burnham administration is expected to take a more sceptical view of a private sector rescue, given Burnham’s previous comments in favour of greater public control of water companies.

A person close to the consortium said no legal action is currently being taken and described the move as precautionary.

Thames Water warned this week that it could run out of money by the end of the year, although creditors have indicated they are prepared to continue financing the company into 2027.

Ofwat is expected to consider any revised proposal in line with its statutory duty to protect customers’ interests.

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