A group of over 100 senior creditors to Thames Water has proposed an emergency turnaround plan involving £5bn in new funding (£3bn equity, £2.25bn debt) and a £6.7bn total debt writedown. The plan aims to reduce Thames Water's £20bn debt and prepare for a stock market listing, but it hinges on significant leniency from Ofwat regarding environmental fines and is criticized by the regulator for not writing off enough debt (only 20% vs. needed 30-40%) to secure an investment-grade credit rating.
Thames Water creditors offer up £5bn as part of emergency turnaround plan
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TL;DR: Key points with love ❤️A group of over 100 senior creditors to Thames Water has proposed an emergency turnaround plan involving £5bn in new funding (£3bn equity, £2.25bn debt) and a £6.7bn total debt writedown. The plan aims to reduce Thames Water's £20bn debt and prepare for a stock market listing, but it hinges on significant leniency from Ofwat regarding environmental fines and is criticized by the regulator for not writing off enough debt (only 20% vs. needed 30-40%) to secure an investment-grade credit rating.
Trending- 1 Last week: The US private equity firm KKR pulled out as the preferred bidder for Thames Water.
- 2 Recently: The group of senior creditors stepped forward with their rescue plan.
- 3 Ongoing: Ofwat has commenced a thorough review of the creditors' submission.
- Potential for Thames Water to avoid temporary nationalisation
- Ongoing negotiations and debate with Ofwat over the adequacy of debt writedowns and regulatory leniency
- Continued financial scrutiny and uncertainty for the company
- Risk of public backlash if environmental fines are waived
What: A group of over 100 senior creditors of Thames Water proposed a £5bn emergency turnaround plan.
When: The plan was put forward recently, following the withdrawal of KKR last week.
Where: UK, serving 16 million customers in London and south-east England.
Why: To rescue Thames Water from financial collapse, reduce its approximately £20bn debt, and avoid government intervention through a special administration regime (temporary nationalisation).
How: The plan involves injecting £3bn of equity and £2.25bn of debt, along with writing off about £6.7bn of their loans. It also requests that Ofwat set lower environmental standards and grant leniency on past and future fines.