Plans to restructure Thames Water have been approved by a High Court judge, just weeks before the struggling utility was set to run out of money. Thames Water Utilities Holdings Limited (TWUH), the parent company of Thames Water Group (TWG), England’s biggest water company with about 16 million customers, is in around £16 billion of debt and needs £3.3 billion over the next five years to keep running.
Earlier this month, Mr Justice Leech heard several days of arguments over a restructuring plan, known as the “company plan”, which, if approved, would provide a loan of up to £3 billion with a 9.75% interest rate. TWUH’s lawyers claimed the company would enter special administration (SAR) if the plan was not approved, but a smaller group of secondary creditors proposed an alternative plan known as the “B plan”, which the court heard would provide the company with the same funding but on better terms and should be adopted instead.
In a judgment on Tuesday, Mr Justice Leech ruled that the “relevant alternative” to the company plan being approved was SAR, and said: “After taking into account the public interest in ensuring the uninterrupted provision of vital public services, I nevertheless exercise my discretion to sanction the plan.”. A hearing before the same judge, dealing with consequential matters arising from the judgment, is set to begin later on Tuesday.
