Thames Water has urged the High Court to approve its £3billion restructuring plan in a bid to avoid renationalisation.
In a statement on Thursday, the embattled water group said more than 75 per cent of creditors supported the restructuring, referencing a new report which claimed that no creditors will be negatively impacted by the plan.
In October, Thames Water initiated a £3billion fundraising campaign to ensure its operation into the next year by involving various creditors, a move that requires court approval.
The water group previously revealed that it had only £500million in cash and hoped the additional funds would prolong its operational capacity until at least October 2025.
Earlier this month, Thames Water commissioned an independent expert report to support a debt restructuring proposal to the High Court.
Now it has released a supplemental report to further bolster its case.
In charge: Chris Weston is the chief executive of Thames Water
Following the publication of the original report, Thames Water agreed to new terms with its bond holders, including break rights that activate if the company still holds ‘junk bond’ status by 2028.
Today’s supplemental report claimed that no creditors would be worse off following the restructuring.
But, a group of creditors has contested this, arguing in court documents that a different plan should be pursued to provide cheaper liquidity to the company.
The group stated in court documents seen by Reuters that it ‘does not consider that the high financing costs and entrenched control that the Class A creditors will have over any subsequent recapitalisation transaction, if the plan is sanctioned, is in the best interests of the group, its creditors or its customers’.
In December, Ofwat fined Thames £18million for violating new rules on dividends, which allow the regulator to take enforcement action against companies failing to link payouts to performance.
The debt riddled utility, which was also given the green light to hike customer bills 35 per cent by 2030, was found to have unjustifiably paid £158.3million to shareholders.
The regulator said Thames Water made interim dividend payouts totalling £37.5million to its holding company, Thames Water Utilities Holdings Limited, in October last year and further payouts of about £158.3million in March 2024.
The regulator said it will claw back £131.3million of the payments so the money does not come out of customer bills.
David Black, Ofwat’s chief executive, said the penalty was ‘a clear warning to the whole sector.’
He added: ‘We will take action against companies who take money out of these businesses, where performance does not merit it.’
Under plans revealed by Ofwat this month, the average annual Thames Water bill will rise to £588 by 2030, £152 more than current levels of £436 a year.
Ofwat said the lion’s share of that increase, about £108 of the £152, will come in the 2025-2026 financial year.
The ruling falls short of the 59 per cent Thames Water had said it needed in the run-up to the decision, as the embattled water company tries to negotiate a bailout.
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