Britain’s largest water supplier Thames Water will head to the High Court on Tuesday to seek approval to get a £1.5 billion liquidity plan underway.
Facing £16 billion of debt and the prospect of insolvency, Thames Water will ask a judge to approve a meeting of its creditors to vote on a proposed funding plan.
The ‘convention hearing’ is expected to be short, with skeleton arguments to be made by Thames Water and numerous creditor classes.
Sources say it should move forward without a hitch since there is a broad consensus among creditors.
The court appearance marks the first stage for Thames Water to tap essential funds to keep the business afloat.
Thames Water has warned that it could run out of cash as soon as March 2025 without a proposed £3 billion emergency injection.
Failure to do so will lead to the inevitable renationalisation of the utility.
Although some politicians, including Reform UK deputy Richard Tice, have suggested putting Thames Water out of its misery by renationalising it, the company and its creditors say they want to find a market-based solution to its financial woes.
If the judge approves the creditor meeting tomorrow, the next stage will see creditors vote on the £1.5 billion facility in January. Thames Water will then be able to draw down funds on a month-by-month basis.
It is a momentous week for Thames Water in general.
On Thursday, regulator Ofwat will make its ‘final determination’, which will outline Thames Water’s (and all other water suppliers’) scope for increasing bills for the next five years.
While few customers want to see their water bills increase, the water companies see it as necessary for essential infrastructure upgrades.