Thames Water is subject to a High Court hearing this week as negotiations continue as to whether the near-bankrupt firm should be placed into administration. England's largest water company is set to run out of money by the end of March and is seeking the court's approval of plans to inject up to £3bn to keep it afloat, or risk entering special administration. The restructuring, known as the company plan, would effectively guarantee Thames Water can keep operating until 2026 by providing £1.5bn of funding with a 9.75 per cent interest rate, with a further £1.5bn potentially available, ahead of a substantive restructuring later this year.

Hearings to determine its future commenced on Monday. Barristers for Charlie Maynard, the Liberal Democrat MP for Witney in Oxfordshire, told the court that allowing the utility to enter administration was a "better and fairer course" that served "the public interest and customers' interests". In written submissions, William Day, for Mr Maynard, said the company plan "does not confront Thames Water's financial difficulties" and instead was a "sticking plaster".

He said: "The envisaged bridge finance aggravates rather than mitigates the Thames Water debt doom loop. "It comes at (an) egregious cost; is likely to be exhausted mainly in payment towards Thames Water's existing debt obligations, rather than being deployed in the business; and provides a bridge to nowhere.". He continued: "The terms of the restructuring plan are a poor short-term fix and not financially sustainable in the mid or long term for Thames Water.".

Thames Water serves around 16 million customers, almost 25 per cent of the UK's population, but it is in about £16bn of debt and needs £3.3bn over the next five years to keep running. It has also been at the centre of growing public outrage over the extent of pollution, rising bills, high dividends, and executive pay and bonuses at the UK's privatised water firms. The court has heard that it will run out of money by March 24 if the restructuring is not approved, with the company plan approved by creditors holding more than 75 per cent of its Class A debt, which is worth about £11.5bn and is the least risky class of bonds in its debt pile.

A Thames Water spokesman previously said the company was "focused on turning round the business". They said: "We have a robust plan that we are confident delivers on this objective, and this court process is an important step on the path to putting the company back on a stable financial footing.". The hearing before Mr Justice Leech is set to conclude on Thursday, with a judgment expected in writing later.

Thames Water is part of a group of companies, known as the Kemble Water Group, and is privately owned by a mix of people and businesses. The largest shareholder as of July 2023 is the Canadian pension fund Ontario Municipal Employees Retirement System (Omers) – about 32 per cent. Other investors include China’s biggest sovereign wealth fund, China Investment Corporation – almost nine per cent; the UK’s biggest private pension fund, the Universities Superannuation Scheme – 20 per cent; and Infinity Investments, a subsidiary of the Abu Dhabi Investment Authority – 10 per cent.

Other investors, according to the Independent, include the British Columbia Investment Management Corporation (8.7 per cent); Hermes GPE (8.7 per cent); Queensland Investment Corporation (5.4 per cent); Aquila GP Inc (5 per cent); and Stichting Pensioenfonds Zorg en Welzijn (2.2 per cent). Thames Water was, as well as all other water companies in England, privatised in 1989. Former prime minister Margaret Thatcher sold off the publicly owned water and sewage industry for £7.6bn.

When Mrs Thatcher privatised the water companies, she said this would “lead to a new era of investment in England’s water infrastructure”. The water companies were put on the stock market for investment and significant amounts of Government debt were written off to allow for the new slate. Alongside the privatisation, three separate and independent bodies were established to regulate the activities of the water and sewage companies.