Thames Water wins green light for next phase of emergency loan plan
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Thames Water has won court approval to pursue the next phase in securing a £3bn emergency loan, with a hearing intended to secure creditor approval scheduled for four days in the first week of February. The troubled utility told the High Court that without the loan it will run out of cash by 24 March next year and, as a consequence, is likely to be pushed into a government-backed special administration regime (SAR).
Thames told the court that the loan is being provided by a group of A-class creditors, who between them hold around £11.5bn of the £16bn of debt held at operating company level. A further £3.6bn of debt is held at holding company level. Money latest: Major pub chain to raise prices.
The emergency loan, which is the first part of a wider restructuring plan, is opposed by a smaller group of creditors, who account for £750m of around £1.4bn of B-class debt. They face being wiped out entirely under the company's plans. Under the terms of the loan the maturity date of existing loans will be extended by two years, and other creditors will be pushed back in the queue. As a consequence the plan requires support from 75% of all classes of creditors and court approval.
The B-class shareholders have prepared an alternative loan scheme at a cheaper rate of 8% that would save the company £158m. Thames Water seeks court approval for emergency bailout. Five charts that explain why water bills are about to go up. Thames Water sewage spills spike as crucial bill decision looms.
Setting the date for a sanctions hearing in February, Mr Justice Trower said: "It was not the purpose of today's hearing to say whether this plan should or should not be sanctioned by the court. This is not the time to decide if this proposal is fair or if there is a relevant alternative.".
