Junior Thames Water bondholders push for changes to £3bn emergency loan

1 week ago 13
ARTICLE AD BOX

A group of junior Thames Water bondholders are pushing for changes to a rival syndicate's proposed £3bn loan that they argue is prohibitively expensive for Britain's biggest water company.

Sky News has learnt that the class B creditors - who have also offered their own emergency financing package to Thames Water - want a so-called make-whole provision which would cost hundreds of millions of pounds under the A group's proposal to be removed or made less onerous.

The make-whole clause relates to early repayment of the new loan.

They also want a stipulation preventing Thames Water from refinancing the new debt without creditor approval to be removed from the deal.

It was unclear on Wednesday whether the class A creditors would be willing to amend their deal along the lines of the class B group's demand.

The battle for control of the utility, which has about 16 million customers but is drowning under close to £20bn of debt, is entering a crucial phase, with a critical determination on its business plan to be delivered by Ofwat next month.

Thames Water is also trying to raise about £3bn in equity, with investors such as Carlyle, Castle Water and KKR considering making offers.

The class A group's plan has secured the requisite approval from bondholders, with the additional financing expected to buy Thames Water close to a year of additional headroom.

The threat of temporary nationalisation continues to hang over the company, however, if Ofwat thwarts its five-year spending plan.

The company's shareholders have already abandoned plans to inject billions of pounds into it, describing it as uninvestible.

Thames Water is said to be keen for the rival creditor groups to join forces after weeks of competing negotiations

Spokespeople for the two groups of creditors declined to comment.

Read Entire Article