Thames Water has been accused of putting 'a gun to the head' of the High Court by threatening temporary nationalisation if a £3bn debt deal is not approved. The water company, which serves nearly a quarter of the UK population, is seeking court approval for emergency funding to stave off collapse.
The company is weighed down by debts of about £19bn and needs the £3bn to secure time for a £3.25bn equity investment. Two rival plans are being considered: one backed by 'class A' bondholders including US hedge funds, and another from 'class B' investors offering cheaper terms.
In court, Thames Water argued the class B offer was 'unsatisfactory' and 'shambolic', while class B bondholders countered that the company's stance effectively puts a gun to the court's head. The company warned it would collapse by the end of March without approval for the class A deal, leading to temporary nationalisation.
About 80 campaigners protested outside court, opposing the deal due to high interest costs that would be passed on to customers. Clean water advocates and Liberal Democrat MP Charlie Maynard also submitted objections, arguing the restructuring plan would burden the company's 16 million customers with nearly 10% annual interest.
The court heard that Thames Water's CFO acknowledged a cheaper scheme would be 'good for the company', but insisted the class A plan was the only implementable option. The company also denied challenging regulator Ofwat over a 35% bill increase, though it had requested a larger rise.
Campaign group We Own It warned that costs from either debt deal would ultimately fall on households through water bills. The hearing is expected to last at least four days, with a decision on the fate of Britain's largest water company pending.
