Thames Water will seek High Court approval for a £3bn rescue plan in a four-day hearing beginning at the Royal Courts of Justice on Monday.
The indebted utility is seeking a judge’s approval for a restructuring plan centred on an emergency loan it says it needs to avoid running out of cash by the end of March.
The loan is being offered by existing “A class” creditors who hold around £11bn of the more than £16bn of debt racked up by Thames Water Utility Holdings, the regulated operating company that serves more than 15 million customers in London and the South East.
The company will argue that without court approval for the deal, it will be forced to enter a Special Administration Regime (SAR), overseen by the government at taxpayers’ expense.
Money blog: What it’s like being a bouncer – including pay
Water campaigners have criticised the terms of the loan, which is being offered at an interest rate of 9.75% over two and a half years with up to a further £100m payable in fees, and called on Environment Secretary Steve Reed to block it and force the company into special administration.
The loan will also be provided on “super-senior” terms, meaning it will be repaid first in the event of administration, and existing creditors will have repayment dates set back by two years.
It will be opposed by a group of B class creditors, who hold around £750,000 of more junior debt and face being wiped out completely in a restructuring.
Read more from Sky News:
Markets tumble in reaction to Trump’s tariffs
Beyonce makes history at Grammys
PM to urge EU to ‘shoulder more of the burden’ on defence
The court…
