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Thames Water has received a rescue of up to £ 3 billion by a judge of the Superior Court, allowing him to remain afloat only a few weeks before he will run out of money and extract fury from activists.
To a measure, he described a “national scandal” and a “disaster” for the stock market and the environment of the public services company, the plans to restructure the largest water company in England, which is around 16 million of clients, they were approved on Tuesday.
However, Mr. Justice Leech then ruled that a group of creditors of Thames Water and a Democratic liberal deputy can appeal against the approval of the “Odero” agreement in the Court of Appeals.
Thames Water Utilities Holdings Limited (TWUH), the Matrix of Thames Water Group (TWG), needs £ 3.3 billion in the next five years to continue working, since it faces approximately £ 16 billion of debt.
The company has been in the center of the growing public outrage over the scope of pollution, the increase in invoices, high dividends and executive payment and bonuses in privatized water companies in the United Kingdom.
Earlier this month, Mr. Justice Leech heard several days of arguments about whether to approve a restructuring plan, known as the “Company's Plan”, which provides a loan of up to £ 3 billion with an interest rate of the interest of the 9.75 percent, with a view to enabling operations until next year.
TWUH lawyers affirmed that the company would enter the Special Administration (SAR) if the plan was not approved, but a smaller group of secondary creditors proposed an alternative plan known as the “Plan B”, which the court heard that it would provide The company the same financing but in better terms and must adopt instead.
In a sentence on Tuesday, Mr. Justice Leech ruled that the “relevant alternative” to the company's plan that was approved was SAR and said: “After taking into account the public interest in guaranteeing the uninterrupted provision of vital public services, However, I exercise my discretion to punish the plan. “
He added that Thames Water should be allowed to “end the puzzle” and find new investors before passing nationalization costs to the government.
The liberal democrats said that the restructuring was “throwing good money after bad”, with Witney Deputy Charlie Maynard announcing that he will appeal the sentence after he gave evidence in the court that alleges that the public services company should put an administration, since customers will end “paying the price.”
Matthew Topham, main activist of the We Own IT campaign group, said in response: “The privatized company will accelerate for a few more months as a gain zombie. This crisis loan will keep Thames afloat in the short term, but its underlying business model is rotten and must be convicted.
“It is based on accumulating debts and increasing customer invoices so that they can pay huge bonds and dividends, all while pumping wastewater on our river paths. The reason they are rescuing is because they ran out of other people's money to align their pockets. It is only a matter of time before they end again to the edge of bankruptcy.
“This is the 'fatality loop' of privatized water and there is only one way to break the cycle, public property.”
The company's finances remain in a knife advantage, and last week he asked regulators to allow him to increase customers' invoices even more in the next five years than the 35 percent granted previously.
Although Thames Water said that customers will not have to pay the loan and their invoices will not be affected.
The loan is being provided by a group of senior creditors of Thames Water, a group of coverage funds, banks and other large investment companies that already owe around £ 11.5 billion, including Abrdn, M&G, Elliott Management and Investco.
Another audience that should consider whether “Plan B” can be submitted to creditors for approval could also be held on Wednesday.
Welcome to the ruling, the executive president of Thames Water, Chris Weston, said: “This is good news for our customers, puts our business on a firmer financial base and allows us to continue investing in our network and offering infrastructure updates Criticism for our clients and the environment. “
President Sir Adrian Montague added: “Critically, it allows the management team to continue progressing the change.”
The Superior Court previously heard in February that the restructuring intended to be an interim measure to keep the company running before a substantive restructuring that expires at the end of this year.
Twuh provides services through a direct subsidiary, Thames Water Utilities Limited (Twul), which serves about 16 million customers, about 25 percent of the United Kingdom population, and has more than 20,000 miles of main water dishes and more than 68,000 miles of sewers in London, the Valley of Thames and the counties of origin.
Tom Smith KC, for Twuh, told the court that letting him run out of money by not approveing the company's plan was “a risk that cannot be executed.”
The company's plan, prepared by a group of investment giants, including Blackrock, Abrdn and M&G, would effectively guarantee Thames Water can continue to operate until 2026 by providing £ 1.5 billion of financing, with other £ 1.5 billion potentially available.
He would also see payment dates for his debts extended for two years.
It was told to the court that it had been approved by the creditors who had more than 75 percent of their class A debt, which is worth around £ 11.5 billion and is the less risky bond kinds in their debt stack.
The “reckless” rescue brand, a “national scandal” and a “disaster”, Charles Watson, president of River Action, said: “Customers will now take the worst part of the mass interest payments through water invoices plus water high, paying for corporate failure while our rivers remain drowned from wastewater. “
He asked the Government to “recover control of the water from the thames and put an end to years of environmental destruction and bad financial management.”
A spokesman for the Environment Department (Defra) said: “The company is still stable and the government is closely monitoring the situation.”
A spokesman for the senior lenders of Thames Water, which includes the financial companies, Apollo Global Management, Elliott Investment Management, Investco and M&G, said the agreement will see the debt battery of the reduced company, will give you more money to invest in its pipes and sewers, and give “enormously improved results for customers and the environment.”
