Thames Water has appealed to the High Court to approve its £3bn restructuring plan in an effort to avoid renationalisation.
The company announced today that over 75 per cent of creditors have supported the restructuring, referencing a new report which asserts that no creditors will be negatively impacted by the plan, as reported by .
In October, Thames Water initiated a £3bn fundraising campaign to ensure its operation into the next year by involving various creditors, a move that requires court approval. The water firm disclosed that it had only £500m in cash and hoped the additional funds would prolong its operational capacity until at least October 2025.
Earlier this month, Thames Water commissioned an independent expert report to support a debt restructuring proposal to the high court, and today released a supplemental report to further bolster its case. Following the publication of the original report, Thames Water agreed to new terms with its bond holders, including break rights that activate if the company still holds ‘junk bond’ status by 2028.
Today's supplemental report claimed that no creditors would be worse off following the restructuring. However, a group of lower-ranked creditors has contested this, arguing in court documents that a different plan should be pursued to provide cheaper liquidity to the company.
The group stated in court documents seen by Reuters that it "does not consider that the high financing costs and entrenched control that the Class A creditors will have over any subsequent recapitalisation transaction, if the plan is sanctioned, is in the best interests of the group, its creditors or its customers," Earlier this week, it was disclosed that Thames Water had redirected millions of pounds earmarked for environmental clean-ups to fund bonuses and investor payouts. In December, Ofwat fined Thames £18m for violating new rules on dividends, which allow the regulator to take enforcement action against companies failing to link payouts to performance.
