Overview
- Rachel Reeves told senior lenders in a July letter that the government wants a sustainable, market-based solution that delivers a genuine turnaround for customers and the environment.
- Senior creditors holding about £13bn of higher-ranking debt are negotiating with Ofwat and officials on a takeover and are currently the only bidders after KKR withdrew.
- The creditor proposal reported to be under discussion includes £3bn of new equity, £2.25bn of new borrowing, a £3.2bn writedown for senior debt and a wipeout for junior holders and shareholders, with the aim of restoring an investment-grade rating.
- The group is preparing a plc-style board reportedly to be chaired by Openreach chair Mike McTighe, while Ofwat has agreed a payment plan for a £122.7m fine with more than £25m due now and the remainder by March 2030.
- Ministers say they are ready to use a Special Administration Regime if required, with FTI Consulting advising on contingency plans for temporary public control and a possible restructuring.