Thames Water is in court this week to secure £3 billion in loans to increase equity and fund infrastructure improvements.
The company warns that without additional credit, it will exhaust its cash reserves by March 24 and face special administration
Currently, Thames Water carries over £17 billion in debt, and environmental groups such as We Own It and Windrush Against Sewage Pollution warn that taking on additional loans will only worsen the financial burden.
Outside the court on Monday, demonstrators chanted ‘Stop the bailout,’ joined by Liberal Democrat MP for Witney, Charles Maynard, who said the proposal is “a poor short-term fix” and that “ultimately those 16 million customers are the ones who are paying… and that’s not fair.”
A spokesperson from industry regulator Ofwat stated that “Thames Water must continue to pursue all options to seek further equity to fund its turnaround plan for the benefit of customers and the environment.
“Safeguards are in place to ensure that services to customers are protected, regardless of issues faced by shareholders of Thames Water.”
Campaigners and certain class A creditors are concerned that the new loans Thames Water is pursuing carries a 9.75% annual interest rate, along with further fees and conditions that will give lenders more control over the company.
Maynard claimed that ‘a quarter of [the customer’s] bill will go toward paying interest expenses.’
Bondholders providing the loans include U.S.-based hedge funds such as Elliott Management.
Thames Water, which services 24% of the UK, announced a 31% increase in water bills starting in April, with some customers facing hikes of up to £639.
Water UK states that the additional funds are necessary for large-scale investments, including upgrading 1,700 wastewater treatment plants and constructing nine reservoirs.
Matthew Topham, lead campaigner for We Own It, stated outside the High Court on Monday, “we have an extreme form of privatisation where we not only bring in a company to run the service, we’ve actually sold off the pipes themselves…”
Topham asserts that “we need to take control of the crisis” and that if put into special administration, the government can “cut the debt… and then bring [Thames Water] into permanent public ownership.”
The hearing is scheduled to conclude on Thursday, with a judgment expected next week.
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HeadlineCampaigners mount pressure against Thames Water in high court
Short HeadlineThames Water in court for £3 billion loan
StandfirstEnvironmentalists and creditors warn that new loans will add to the company's debt pile
Thames Water is in court this week to secure £3 billion in loans to increase equity and fund infrastructure improvements.
The company warns that without additional credit, it will exhaust its cash reserves by March 24 and face special administration
Currently, Thames Water carries over £17 billion in debt, and environmental groups such as We Own It and Windrush Against Sewage Pollution warn that taking on additional loans will only worsen the financial burden.
Outside the court on Monday, demonstrators chanted ‘Stop the bailout,’ joined by Liberal Democrat MP for Witney, Charles Maynard, who said the proposal is “a poor short-term fix” and that “ultimately those 16 million customers are the ones who are paying… and that’s not fair.”
A spokesperson from industry regulator Ofwat stated that “Thames Water must continue to pursue all options to seek further equity to fund its turnaround plan for the benefit of customers and the environment.
“Safeguards are in place to ensure that services to customers are protected, regardless of issues faced by shareholders of Thames Water.”
Campaigners and certain class A creditors are concerned that the new loans Thames Water is pursuing carries a 9.75% annual interest rate, along with further fees and conditions that will give lenders more control over the company.
Maynard claimed that ‘a quarter of [the customer’s] bill will go toward paying interest expenses.’
Bondholders providing the loans include U.S.-based hedge funds such as Elliott Management.
Thames Water, which services 24% of the UK, announced a 31% increase in water bills starting in April, with some customers facing hikes of up to £639.
Water UK states that the additional funds are necessary for large-scale investments, including upgrading 1,700 wastewater treatment plants and constructing nine reservoirs.
Matthew Topham, lead campaigner for We Own It, stated outside the High Court on Monday, “we have an extreme form of privatisation where we not only bring in a company to run the service, we’ve actually sold off the pipes themselves…”
Topham asserts that “we need to take control of the crisis” and that if put into special administration, the government can “cut the debt… and then bring [Thames Water] into permanent public ownership.”
The hearing is scheduled to conclude on Thursday, with a judgment expected next week.
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