Thames Water (TWUL) has rejected a proposed restructuring plan put forward by its Class B creditors as an alternative approach to the company’s plan - the junior bondholders have accused the Class A senior creditors of attaching “predatory” conditions to a £3 billion emergency loan for a iquidity extension transaction.
The latest Liquidity Extension Update issued by Thames on 7 January this week to the London Stock Exchange says:
“TWUL is aware that certain Class B Creditors have today published a practice statement letter (Class B PSL) in relation to a parallel restructuring plan to implement an alternative liquidity extension transaction.
Thames Water had previously announced a consent process for a transaction support agreement (TSA) in connection with implementing a Liquidity Extension Transaction (LET).
The LET is to be implemented by a restructuring plan proposed by Thames Water Utilities Holdings Ltd pursuant to Part 26A of the Companies Act 2006.
Strong creditor support for the company plan
Thames’ latest Liquidity Extension Update says:
“As at 3 January 2025, creditors holding circa 89% of TWUL’s secured debt totalling circa £16.5 billion have acceded to the TSA, agreeing to support the Liquidity Extension Transaction.
“This includes over 75% by value of each of the Class A Debt (Make-Whole) Providers, the Class A Debt (Non-Make-Whole) Providers, the Interest Rate and Index Hedging Providers, the Liquidity Facility Providers and the Currency Hedging Providers.”
The update points out that plan creditors who are party to the TSA are “obliged to vote in favour of the company plan and to not support any alternative”, including the Class B alternative liquidy extension transaction.
It also says the Class B PSL is not approved or authorised by TWUL or TWUHL.
“The Board and leadership team remain focused on implementing the Company Plan, stabilising the business and seeking the best financial and operational outcome for customers, the environment, UK taxpayers and the UK economy,” the update says.
“Those creditors who are a party to the TSA are encouraged to comply with their contractual obligations,” the update concludes.
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