The High Court has approved an emergency £3bn debt package for Thames Water, keeping the company afloat for another few months.
The UK’s biggest water provider is in £16bn of debt following and had said it would run out of money by March 24.
Now, it has been given a lifeline after getting the court approval needed for the emergency £3bn loan at the centre of a rescue plan for the company.
However, the decision is “very likely” to be appealed by Lib Dem MP Charlie Maynard, who has called for Thames Water to come under government control.
The debt package will give Thames Water an initial tranche of £1.5bn to fund it until September 2025.
The loan also comes with a 9.75 per cent interest rate, the Guardian reports.
Mr Justice Leech, who heard the case, said: “The costs of finance and adviser fees in the present case are very high.
“Indeed, they might be described as eye-watering.”
Adrian Montague, Thames’s chair, said: “The court’s approval of the company plan marks a significant milestone for Thames Water, enabling us to proceed with the implementation of the liquidity extension transaction.”
The emergency debt package comes after Thames Water dished out £770,000 in bonuses to bosses. The company also called for a steep 59 per cent increase in customer bills last year, well above the 35 per cent limit imposed by industry regulator Ofwat. Thames has appealed the decision, and the second £1.5bn of the debt package will be used to see it through this appeals process.
Many have criticised the decision to approve the emergency package, and are calling for Thames Water to be brought under government control.
Public services campaign group We Own It, said in a post on X: “This is just a stay of execution. Thames will limp on for a few months like a profit-thirsty zombie. The privatised business model is rotten and must be condemned. Public ownership NOW!”
Lib Dem MP for Witney, Charlie Maynard, said he intends to appeal the judgement, describing the package as “futile, expensive and extremely short-term.”
He wrote on X: “The money from our bills which is being spent on interest repayments is desperately needed to repair water infrastructure, improve customer service, and clean up our rivers.
“I intend to keep fighting for Thames Water’s customers by appealing this judgement. The only way to get Thames out from under this mountain of debt, and back onto a stable financial footing at this point is to put the company into Special Administration with a swift exit plan.”
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