Thames Water Bailout: A Turning Tide Amid Britain's Water Woes

Thames Water's bondholders have proposed a substantial rescue plan involving £5 billion in new equity and debt, while also agreeing to write off some existing obligations. In exchange, they demand more lenient pollution regulations and clemency on fines, as they aim to stabilize the troubled utility.

The move by senior creditors came after private equity firm KKR withdrew, leaving them as a crucial alternative to prevent nationalisation. Their proposed £17 billion plan targets the underlying issues facing Britain's largest water supplier, beleaguered by financial struggles and environmental concerns.

A Thames Water recapitalization could lead to a market listing, but creditors warn that regulatory leeway is essential. However, granting such concessions could be politically fraught due to the government's commitment to clean waterways, presenting a dilemma over nationalization's financial implications.

(With inputs from agencies.)