The High Court hearing to decide on a proposal for Thames Water to secure up to an additional £3 billion in funding begins today.
The move is another stage in the water company’s efforts to avoid the prospect of entering a Special Administration Regime and implement a liquidity extension transaction.
The Court is due to consider the proposal put forward by Thames Water to obtain funding from the company’s Class A creditors. Thames Water has rejected an alternative funding proposal piut forward by its Class B creditors.
Julian Gething, Thames Water’s Chief Restructuring Officer said:
"Our plan remains the only implementable solution to putting the business on a firmer financial footing. Its approval will not affect customer bills but will unlock billions of pounds for investment in our network, fixing pipes, upgrading our sewage treatment works and maintaining high-quality drinking water."
The Sanction Hearing to consider the restructuring plan proposed by Thames Water in connection with implementing the liquidity extension transaction is due to start at 10.00 am this morning.
The hearing is anticipated to run to 6 February 2025, although it may be extended in the event that the Court considers an extension to the Sanction Hearing timetable to be necessary.
At the Sanction Hearing, the Court will consider whether to grant an order to sanction the Plan.
The creditors affected by the Plan have the right to attend in person or through counsel and make representations at the Sanction Hearing.
Last week the water company separately initiated further legal moves to keep the company’s interim recapitalisation transaction on track – and says that the only alternative to the company’s restructuring plan is special administration, and that there is presently no alternative implementable transaction for Thames to avoid special administration if the company’s plan is not approved.
The company’s preferred plan would see Thames secure a further loan of up to £3 billion.
The loan would be made in two instalments – a second payment would be used if Thames Water decides to appeal to the Competition and Markets Authority (CMA) against Ofwat's Final Decision to allow the utility a 35% increase in customer bills in AMP8.
Thames Water had asked for a 53% increase - the firm has until 18 February to launch an appeal to the CMA, a process which could take as much as a year to complete.
Also due to appear at today’s hearing, environmental NGO Windrush Against Sewage Pollution WASP and its constituency MP, Charlie Maynard will be in the High Court to raise the public interest and customer case, with legal representation.
Charlie Maynard and WASP secured pro bono assistance to be represented by a legal team at the sanction hearing. The counsel team is led by William Day of 3 Verulam Buildings, with Marriott Harrison acting as the instructing solicitors.
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