Thames Water is urging the High Court to approve a £3 billion restructuring plan
Thames Water has urged the High Court to approve its £3 billion restructuring plan in a bid to prevent renationalisation.
In a statement on Thursday, the embattled water group said more than 75 percent of creditors supported the restructuring, citing a new report claiming no creditors will be negatively affected by the plan.
In October, Thames Water launched a £3 billion fundraising campaign to secure its operation in the following year by involving several creditors, a move that requires court approval.
The water group previously revealed it had just £500 million in cash and hoped the additional funds would extend its operating capacity until at least October 2025.
Earlier this month, Thames Water commissioned an independent expert report in support of a debt restructuring proposal at the High Court.
Now it has released an additional report to further strengthen its case.
Responsible: Chris Weston is the CEO of Thames Water
Following the publication of the original report, Thames Water agreed to new terms with its bondholders, including break rights that will be activated if the company still has ‘junk bond’ status in 2028.
Today’s supplementary report claimed that no creditor would be worse off following the restructuring.
But a group of creditors has disputed this, arguing in court documents that another plan should be pursued to provide the company with cheaper liquidity.
The group said in court documents seen by Reuters that it “does not believe that the high financing costs and entrenched control that Class A creditors will have over any subsequent recapitalization transactions, if the plan is approved, are in the best interests of the be a group. , its creditors or its customers.
In December, Ofwat fined Thames £18 million for breaching new dividend rules, which allow the regulator to take enforcement action against companies that fail to link payouts to performance.
The debt-ridden utility, which was also given the green light to increase customer bills by 35 percent by 2030, was found to have wrongly paid £158.3 million to shareholders.
The regulator said Thames Water paid interim dividends totaling £37.5 million to its holding company, Thames Water Utilities Holdings Limited, in October last year, with further payouts of around £158.3 million in March 2024.
The regulator said it will claw back £131.3 million of the payments so the money doesn’t come out of customers’ accounts.
David Black, chief executive of Ofwat, said the fine was ‘a clear warning to the entire sector’.
He added: ‘We will take action against companies taking money out of these businesses where performance does not justify it.’
Under plans revealed by Ofwat this month, the average annual bill for Thames Water will rise to £588 by 2030, £152 more than current levels of £436 per year.
Ofwat said the lion’s share of that increase, around £108 of the £152, will come in the 2025-2026 financial year.
The ruling falls short of the 59 percent that Thames Water had deemed necessary in the run-up to the decision, as the embattled water company tries to negotiate a bailout.
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