Water firm in court to fight for extra cash

THAMES Water is battling it out in the High Court to obtain an emergency cash lifeline.

The firm is set to run out of money by the end of March and is seeking the court’s approval for a restructuring plan that includes a £3 billion emergency loan to keep it afloat.

The restructuring, known as the company plan, would effectively guarantee Thames Water can keep operating until 2026 and avoid the risk of being put into special administration.

The loan is being offered by existing “A class” creditors who hold about £11bn of the more than £16bn of debt racked up by the firm.

It would provide the company with £1.5bn of funding with a 9.75 per cent interest rate, with a further £1.5bn potentially available, ahead of a substantive restructuring later this year.

If Thames Water fail to secure approval, it could be put into temporary nationalisation, which is estimated to cost the government about £2bn a year.

The hearing began Monday and was expected to end yesterday (Thursday).

Lawyers supported by Windrush Against Sewage Pollution are making a case against the loan and for the company to go into special administration.

Thames Water has already announced that customer bills will increase by 31 per cent from April 1, raising the average annual bill to £639.

The company is currently contemplating an appeal against regulator Ofwat’s decision to permit a 35 per cent increase in customer bills over the next five years, which is below the 53 per cent hike the company had requested.

District councillor and clean water campaigner Jo Robb said Thames Water is asking for an expensive bailout loan that would ultimately be funded by its customers.

She said: “The court is being asked to endorse what is, in essence, daylight robbery and the government is sitting on its hands.

“It’s time for the government to step in and put the people, not foreign creditors, first. Thames Water must be put into special administration and returned to permanent public ownership.”

Cllr Robb urged that special administration should not be used merely to wipe the company’s debt and to return it to private ownership.

She said: “Thirty years on, the Government must recognise what the public has known all along — that water privatisation has been an abject failure.

“Now is our chance to reverse course, to put Thames Water’s customers first, and bring the company back into public ownership, to be managed for people and nature, not private profit.”

Cllr Robb said she wanted to thank the campaigners at Windrush Against Sewage Pollution that were supporting the case.