Thames Water secures £3bn lifeline after court ruling
Thames Water won a crucial high court battle to obtain a £300 million rescue loan, avoiding the prospect of debt-based companies being controlled by the government.
The UK’s largest water and waste company will run out of cash by the end of March and may be temporarily nationalized to keep the services running.
The court’s ruling on Tuesday puts suppliers a financial life for a major restructuring, but the company’s future remains uncertain as it struggles with debt worth about £17bn.
The Thames has also faced serious criticism of its performance in recent years after a series of sewage discharges and leaks.
Since its emergence about 18 months ago, the government has placed the Thames water (Thames water) at about a quarter of the UK’s population and employs 8,000 people.
Regardless of what happens to the company in the future, water supply and waste services for the household will continue normally.
In its latest bid to survive, lenders have provided Thames with a further loan of up to £3 billion in an attempt to restructure their business.
But after a group of creditors opposed the plan, it ended up in the High Court and considered the interest rate of 9.75% of the loan to be too expensive.
A High Court judge approved the reorganization plan on Tuesday.
After the victory, Thames Water chairman Sir Adrian Montague said it marked a “important milestone” for the company, while CEO Chris Weston ) says “put our business on a stronger financial basis”.
Thames insists that its emergency funds will provide a major restructuring for its breathing space to complete a major restructuring of its debt and attract cash injections from potential new investors.
The first payment of 1.5n will keep the company through the fall.
The second part will be used to fund the company as it proposes a decision on how much Thames can raise household bills through – a process that will take up to a year.
On Friday, Thames launched a call to enable it to increase bills, exceeding the awards from regulators.
Ofwat has pushed Bill up 35% over the next five years, but Thames believes that Bill needs to increase 53%.
