Thames Water Seeks Court Approval for £3 Billion Rescue Plan Amid Crisis
Thames Water requests court approval for a £3 billion debt rescue plan, as it faces a potential nationalisation and financial collapse without the lifeline.
Thames Water has approached an English court to seek approval for a £3 billion debt rescue plan aimed at averting nationalisation.
The four-day court hearing, led by Judge Thomas Leech, began on Monday, with witnesses from the utility company presenting evidence to support the rescue plan.
Thames Water, which is burdened with £17 billion in debt, has warned that without the plan’s approval, it could run out of cash by March.
The company faces increasing public scrutiny due to its involvement in pollution scandals, including the discharge of raw sewage into rivers and seas.
Thames Water's rescue plan, if approved, would include new funding, debt extensions, and a £3.25 billion equity raise to secure the company’s future.
However, the plan is contested by a group of lower-ranked creditors who argue that it would benefit majority creditors at the expense of minority ones, and their alternative proposal is aimed at providing more favorable terms.
Despite the opposition, Thames Water has the support of over 90% of its secured creditors.
The company has also raised concerns over the regulatory cap on price increases, which allows it to raise bills by 35% over the next five years, a figure lower than the 53% increase it says is necessary.
Thames Water has until February 18 to challenge the price decision.
If the plan is not approved, the company could be placed into special administration, forcing the government to take control.