Thames Water, England's largest water company, is teetering on the brink of bankruptcy, with a projected cash shortage by March unless its restructuring plans are approved. Two creditor groups are locked in a High Court dispute over the best course of action to keep the company afloat. Thames Water, burdened with £16 billion in debt, requires £3.3 billion over the next five years to maintain operations. While one group, holding Class A debt, supports a plan involving a £3 billion loan with a 9.75% interest rate, another group, holding riskier Class B bonds, favors an alternative plan with different loan terms. The company also awaits a crucial decision from regulator Ofwat regarding a potential 59% increase in bills over the next five years.
Thames Water , England’s biggest water company, will run out of money by March if restructuring plans are not approved.
But this is opposed by a secondary group of creditors who hold a portion of Thames Water’s debt – thought to be about £750m of riskier, Class B bonds – who told the court that an alternative plan, the “B plan”, should be approved, which also involves a £3bn loan but with different terms. In written submissions, he continued: “The group provides essential infrastructure services for which it is dependent on its suppliers and employees and, as such, it is critical that the group’s liquidity position is clearly stabilised well in advance of that date.”
Thames Water has 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, and Mr Smith said there was a “public interest in having Thames Water on a stable platform”.
Thames Water Bankruptcy Restructuring Creditors High Court Debt Ofwat Water Bills
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