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Thames Water has appealed to the High Court to approve its £3bn restructuring plan in a bid to avoid renationalisation.
In a statement on Thursday, the embattled water group said more than 75 percent of creditors supported the restructuring, referencing a new report that claimed no creditors will be adversely affected by the plan.
In October, Thames Water launched a £3bn fundraising campaign to secure its operation over the next year by involving a number of creditors, a move that requires court approval.
The water group previously revealed it only had £500m in cash and hoped the additional funding would extend 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.
It has now published a supplementary report to further strengthen its case.
In charge: Chris Weston is the chief executive of Thames Water
Following the publication of the original report, Thames Water agreed new terms with its bondholders, including break rights that will be triggered if the company still maintains “junk bond” status by 2028.
Today’s supplementary report stated that no creditor would be worse off after the restructuring.
But a group of creditors has challenged this, arguing in court papers that a different plan should be followed to provide cheaper liquidity to the company.
The group stated in court documents seen by Reuters that it “does not consider the high financing costs and entrenched control that Class A creditors will have over any subsequent recapitalization transaction, if the plan is approved, to be in the best interests of the cluster”. , their creditors or their clients”.
In December, Ofwat fined Thames £18m for breaching new dividend rules, which allow the regulator to take enforcement action against companies that fail to link payouts to performance.
The debt-ridden utility, which was also given the green light to increase customer bills by 35 per cent by 2030, was found to have unjustifiably paid out £158.3m to shareholders .
The regulator said Thames Water made interim dividend payments totaling £37.5 million to its holding company, Thames Water Utilities Holdings Limited, in October last year and further payments of around £158.3 million to pounds sterling in March 2024.
The regulator said it will recover £131.3 million from the payments so that the money does not leave customers’ bills.
David Black, chief executive of Ofwat, said the penalty was “a clear warning to the entire sector”.
And he added: “We will take action against companies that take money from these businesses, when the performance does not warrant it.”
Under plans revealed by Ofwat this month, Thames Water’s average annual bill will rise to £588 by 2030, £152 more than current levels of £436 a year.
Ofwat said the majority of that increase, around £108 of the £152, will occur 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 troubled water company tries to negotiate a bailout.
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