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A pivotal legal battle commenced today at the Royal Courts of Justice as Thames Water seeks approval for a £3bn emergency funding package amidst mounting pressure from campaigners advocating for temporary nationalisation.
The troubled utility provider, grappling with a staggering £17bn debt burden, has warned it could face cash depletion by March without this crucial financial lifeline. The high-profile case, expected to span four days, has drawn significant attention from MPs, environmental groups, and creditors alike.
Liberal Democrat MP Charlie Maynard, representing Witney, has spearheaded opposition to the restructuring plan, submitting a compelling argument on behalf of 34 clean river groups. His submission emphasises the unsustainable nature of servicing the emergency fund, which carries a steep 9.75% interest rate, potentially leading to increased customer bills.
The company’s financial strategy has faced severe criticism from Oxford University’s Professor Dieter Helm, who highlighted Thames Water’s aggressive approach to balance sheet management, noting how the company “mortgaged assets and paid out proceeds in special dividends” to shareholders.
While Thames Water maintains confidence in its plan, backed by creditors holding over 90% of secured debt, a group of lower-ranked creditors has contested the proposal, presenting an alternative package. The judge must now determine whether dissenting creditors would be disadvantaged compared to the special administration scenario.
The outcome of this landmark case could reshape the future of Britain’s largest water supplier and set precedents for utility company governance. As protesters gather outside the courthouse demanding nationalisation, the verdict will have far-reaching implications for the company’s 16 million customers and the broader water industry.
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