London — The senior creditors of Thames Water on Thursday proposed a £7.5bn debt write-off as part of plans to turn the utility around and stop it being nationalised.
For 18 months, Thames Water has been at the centre of a scandal and has been fined more than £100m for pollution, while its debts of over £20bn have left it close to financial collapse.
The plan from the investor group — comprising 15 institutions including Aberdeen Investments, Elliott, Pimco and Silverpoint Capital — is the only remaining option for Thames Water to avoid the UK government’s special administration regime.
The sector regulator, known as Ofwat, will now assess the proposal “with the aim of reaching alignment as quickly as possible this autumn given the urgent need to stabilise Thames Water and begin to deliver long-term performance improvement”, the investor group said.
The group — known as the London & Valley Water consortium — said that in addition to a £3.15bn equity commitment, it would write off £4b of existing class A debt and £1bn of class B debt, together with an effective write-off of £2.5bn of holdco debt.
In exchange for the write-off, class A debt will receive a minimum of 10% of the new equity, the consortium said in a statement.
It also committed not to pay any dividends during the turnaround process, or until the company is listed, and pledged not to sell Thames Water before March 2030.
Under the plan, all Thames Water’s outstanding fines will be paid.
Reuters
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