Thames Water has staved off effective government ownership after an unsuccessful legal challenge to its financial restructuring.
The Court of Appeal has ruled in favour of a £3bn loan intended to temporarily sort out its finances while the company raises more private investment, dismissing an appeal.
The decision backs the High Court judgment of last month and means the UK’s biggest water supplier is unlikely to be taken into special administration – a form of government control – in the coming days.
Without the loan, Thames Water said it would run out of money on 24 March.
The appeal was launched by Lib Dem MP Charlie Maynard and a small group of Thames Water creditors.
Those creditors had objected to the loan as they faced being wiped out completely in the financial restructuring while Mr Maynard thought special administration would better serve customer interests.
The company is now struggling under a £19bn debt pile. It was unable to secure more investment from existing shareholders over the high fines it faced from regulator Ofwat for rule breaches.
Monday’s decision was met with dismay from campaigners and welcomed by Thames Water, which supplies about 25% of the UK population.
Mixed reaction
“As a vital public utility serving a quarter of the population, the Environment Secretary should be charting a course to safer waters by putting Thames into special administration and public ownership,” said Matthew Topham the lead campaigner for We Own It, which campaigns for public ownership of public services.
“Instead, Steve Reed has just flushed nearly £1bn of households’ cash down the drain in the form of interest payments and professional fees by supporting this terrible deal to go ahead.”
Thames Water chief executive Chris Weston said “We remain focused on putting Thames Water onto a more stable financial foundation as we seek a long-term solution to our financial resilience.”
“Today’s news demonstrates further progress.”
The first…
